Anand Lalaji and his co. penalised $3.1mn, violated False Claims Act

Damian Williams, the United States Attorney for the Southern District of New York; Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); Brian J. Solecki, the Acting Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense – Office of Inspector General, Defense Criminal Investigative Service (“DCIS”); and Christopher Algieri, the Special Agent in Charge of the Northeast Field Office of the Department of Veterans Affairs Office of Inspector General (“VA OIG”), announced today that the United States has settled a civil fraud lawsuit against The Radiology Group LLC and its CEO, Anand Lalaji.

The Radiology Group is a teleradiology company based in Atlanta, Georgia, that provides diagnostic radiology services to hospitals, urgent care centers, and primary care physician centers located across the country. The settlement resolves claims that The Radiology Group and Lalaji violated the False Claims Act by fraudulently billing federal health care programs when the U.S.-based radiologist just “rubber stamped” interpretation reports prepared by contractors in India who were not permitted to practice medicine in the United States or bill federal health care programs. The Government further alleges that The Radiology Group and Lalaji misrepresented who actually rendered the radiology services when seeking payments and improperly sought reimbursement for services furnished entirely by persons located outside of the United States in violation of applicable statutes and regulations.

Under the settlement approved yesterday by U.S. District Judge Analisa Torres, The Radiology Group and Lalaji will pay a total sum of $3.1 million, of which $2,678,387.21 will be paid to the United States with the remainder being paid to various states. As part of the settlement, The Radiology Group and Lalaji also made extensive factual admissions regarding their conduct. Among other things, The Radiology Group and Lalaji admitted that they failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of draft interpretations of radiology scans prepared by India-based contractors. The Radiology Group and Lalaji also admitted that, on numerous occasions, they submitted claims to federal health care programs where the radiologist who reviewed and interpreted the imaging was someone other than the individual listed on the claim for reimbursement.

U.S. Attorney Damian Williams said: “The Radiology Group failed to put in place appropriate safeguards to ensure that their U.S.-licensed radiologists adequately reviewed non-credentialed contractors’ findings before transmitting the reports to physicians who relied on the findings to make patient care decisions. This Office is committed to holding healthcare providers accountable when they violate clear rules and regulations designed to ensure the integrity of taxpayer funded healthcare programs and protect patient quality of care.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As part of the settlement, The Radiology Group and Anand Lalaji admitted that they failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of draft radiology interpretation reports. Defendants potentially jeopardized patients’ health by taking shortcuts when it came to ensuring that important radiological tests were done and reviewed properly. Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

VA OIG Special Agent in Charge Christopher Algieri said: “The VA OIG is dedicated to ensuring veterans receive the quality health care they deserve, and we will continue to work to make certain that VA healthcare programs are not compromised by fraudulent billing practices. The VA OIG thanks the U.S. Attorney’s Office and our law enforcement partners for their efforts in this investigation.”

As alleged in the Complaint filed in Manhattan federal court:

Diagnostic radiology involves the diagnosis of diseases and injuries using imaging techniques, such as Computed Tomography scans, Magnetic Resonance Imaging, and ultrasounds. Radiologists review the generated images and prepare written reports summarizing their findings (an “Interpretation Report”). Health care providers rely on these Interpretation Reports when diagnosing patient conditions and when making important decisions regarding patient medical care.

The Radiology Group is a teleradiology practice that provides diagnostic radiology services to hospitals, urgent care centers, and primary care physician offices (the “Referring Providers”) located throughout the United States. The Referring Providers transmitted imaging to The Radiology Group so that The Radiology Group could review the images and prepare Interpretation Reports. Using online-based teleradiology platforms, The Radiology Group sent the images to contractors located outside the United States, who would conduct initial reviews of the imaging and prepare draft Interpretation Reports. After that process was complete, The Radiology Group’s U.S.-based radiologists were supposed to conduct an independent and separate review of the imaging and make all necessary changes to the Interpretation Reports before transmitting them to the Referring Provider. The final Interpretation Reports were signed by the U.S.-based radiologist, who was responsible for the Interpretation Report’s content.

The Radiology Group and Lalaji knew that contractors located in India who prepared draft Interpretation Reports were not permitted to practice medicine in the United States or bill federal health care programs. Nevertheless, certain radiologists at The Radiology Group merely “rubber stamped” the draft reports and transmitted them to the providers without conducting a meaningful and adequate review of the findings. For instance, one radiologist (“Radiologist A”) approved, signed, and transmitted to providers over 100,000 Interpretation Reports and frequently approved draft CT scan reports in less than 30 seconds.

The Radiology Group and Lalaji also understood that they were prohibited by federal health care program rules from submitting claims for reimbursement for radiology services if the radiologist listed as the rendering provider on the claim for reimbursement had not actually rendered the services. The Radiology Group and Lalaji, however, consistently submitted, or caused to be submitted, claims for payment to federal health care programs that identified either Lalaji or the other owner of The Radiology Group as the rendering provider, even though they had not in fact rendered the radiology services for which reimbursement was sought. Further, on numerous occasions, The Radiology Group and Lalaji submitted, or caused to be submitted, claims for payment for diagnostic radiology services provided by a radiologist who resided and worked in the United Kingdom, in violation of relevant Medicare regulations.

As part of the settlement, The Radiology Group and Lalaji admitted and accepted responsibility for certain conduct alleged by the United States, including the following:

• The Radiology Group and Lalaji knew that they could not bill federal health care programs for the radiology services unless a U.S.-based and licensed radiologist reviewed all of the images associated with the scan, reviewed the Interpretation Report prepared by the individual in India, and made any necessary changes to the Interpretation Report.  However, there were some instances when this did not occur.
• For example, The Radiology Group employed a U.S.-based radiologist (“Radiologist A”) who repeatedly approved Interpretation Reports prepared by non-licensed individuals in India without reviewing relevant images associated with the scan and without conducting any meaningful review of the report or properly considering whether any changes needed to be made to it.
• The Radiology Group and Lalaji failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of the draft interpretations of scans prepared by the non-licensed contractors in India.
• On numerous occasions, The Radiology Group and Lalaji submitted claims to federal health care programs where the radiologist who reviewed and interpreted the imaging was someone other than the individual listed on the claim.
• The Radiology Group and Lalaji understood that Medicare did not pay for medical services rendered by individuals located outside of the United States.  Nonetheless, on numerous occasions, The Radiology Group and Lalaji submitted claims to Medicare for diagnostic radiology services rendered in the United Kingdom by a radiologist employed by The Radiology Group who lived there.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act. Department of Justice