On September 18, the United States Attorney for the Southern District of New York announced that the United States had filed and settled a False Claims Act (FCA) lawsuit against New York cardiologist Klaus Peter Rentrop and his medical practice Gramercy Cardiac Diagnostic Services P.C., for allegedly paying millions of dollars in kickbacks to physicians and their practices for patient referrals. Rentrop and Gramercy Cardiac are to pay $6.5 million as part of the settlement.
In this case, the U.S. intervened in a qui tam whistleblower suit filed against Rentrop and Gramercy. The False Claims Act’s qui tam provisions enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. The U.S. government may intervene and takeover the lawsuit. Regardless of whether the government intervenes, qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
Rentrop founded and owns Gramercy Cardiac, which provides cardiac diagnostic imaging services and previously operated four offices in New York City.
According to the Southern District of New York’s press release, the U.S. alleged that “from 2010 to 2021, Rentrop and Gramercy Cardiac entered into office space rental agreements, often in excess of fair market value, with primary care and other physicians (or their medical practices) in order to induce these physicians to refer patients to Gramercy Cardiac-contracted cardiologists who saw patients at the rented office space. These cardiologists then regularly ordered diagnostic tests and procedures that were performed at Gramercy Cardiac locations and were paid a flat fee for each referral.”
“Over more than a decade, Klaus Peter Rentrop and Gramercy Cardiac paid millions of dollars to doctors and their medical practices in exchange for patient referrals for cardiac testing and procedures,” said U.S. Attorney Damian Williams said. “The Anti-Kickback Statute is meant to ensure that when making medical decisions, a doctor considers only the patient’s best interests — not the doctor’s or others’ financial interests. The defendants violated those doctor-patient relationships through their kickback arrangements, and now they are being held to account.”
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.”