On October 10, the Department of Justice announced that Cardiac Imaging Inc. (CII) and its CEO, Sam Kancherlapalli, have agreed to pay $85 million to settle allegations that the company violated the False Claims Act (FCA). This marks the largest single-district civil settlement ever made in the history of the Southern District of Texas.
The government alleges that Cardiac Imaging Inc. (CII) of paying kickbacks to cardiologists who referred patients for PET scans by paying them excessive fees that were above the fair market value. The United States alleges that these fees were significantly higher than the reasonable market value for the cardiologists’ services because Cardiac Imaging Inc. paid them for each hour spent scanning their patients, even when the cardiologists were not present or were away from Cardiac Imaging’s mobile scanning units providing care to other patients.
A former billing manager at Cardiac Imaging Inc., Lynda Pinto, brought forward allegations of fraud as a whistleblower. She filed a civil suit under the qui tam provision of the FCA which allows private citizens to file lawsuits on behalf of the government if they have knowledge of an individual or company defrauding the government. If the government recovers funds, qui tam whistleblowers may receive anywhere between 15 and 30% of the amount. As per the settlement, the amount that Lynda Pinto will receive is yet to be determined.
“Healthcare providers that pursue patient referrals through illegal kickbacks and other unlawful financial arrangements will be held accountable,” said Principal Deputy Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to safeguard federal healthcare funds by rooting out financial relationships between healthcare providers and referring physicians that can corrupt medical decision-making and increase the cost of care.”
“Paying illegal kickbacks to cardiologists so they refer patients undermines the integrity of federal healthcare programs and needlessly increases costs,” said U.S. Attorney Alamdar Hamdani for the Southern District of Texas. “Patients deserve care based on their medical need and not on a doctor or company’s financial interest or gain. This outcome emphasizes my office’s commitment to pursing justice, ensuring the public’s trust in the federal healthcare system and holding the corrupt accountable.”
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”