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Feds Sue Radiology Company For $150 Million

January 9, 2012
Written by: , Filed in: Cardiac Imaging, Medical Ethics, Nuclear Medicine
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What started as a whistleblower complaint by a radiologist has led the federal government to file a $150 million civil lawsuit against an Ypsilanti, Michigan, radiology company, its owners, and a physician.

The suit charges that the company generated at least 90 percent of its business by paying kickbacks to doctors for referrals and that unnecessary imaging tests put some patients at heightened risk for cancer.

U.S. Attorney Barbara L. McQuade of Detroit announced the suit last week. It targets Universal Imaging, Inc.; Phillip J. Young and Mark Lauhoff, identified by the government as “its current and former owners”; and Gwendolyn Washington, MD, of Southfield, Michigan. (At least for the moment, the Universal Imaging Web site lists “Phil Young” as president and founder; it doesn’t mention Lauhoff.)

The U.S. attorney also announced settlements totaling $1.56 million with 14 physicians or physician groups who, according to the government, accepted payments in return for referring patients to Universal.

A news release from McQuade’s office said:

McQuade praised radiologist Dr. Richard Chesbrough and his wife, Kim Chesbrough, who formerly worked at Universal and who filed a qui tam whistleblower suit under the False Claims Act bringing many of the facts in the case to the government’s attention.

The government alleged that, though Michigan law required Universal to be a nonprofit corporation, it transferred its equipment to a for-profit company with the same owners and made fraudulent lease payments to that for-profit entity, illegitimately benefiting the owners.

The government charged Dr. Washington—who after some apparently high-flying years faces a bleak future—with endangering the health of her patients. In November, the 67-year-old primary-care physician was sentenced to 10 years in prison for, according to an FBI news release, “public corruption, health care fraud, and conspiring to illegally distribute prescription drugs.”

The FBI said that from 2004 through 2010, she performed or ordered numerous unnecessary tests, billing Medicare and Blue Cross Blue Shield of Michigan more than $5 million. The news release said:

Most significantly, Dr. Washington ordered unnecessary and actively harmful nuclear stress tests for her patients at a frequency beyond that of any other medical practice in the country. Because each of these tests is the radiation equivalent of at least 80 to 120 chest X-rays and because excess radiation creates a greater risk of cancer, Dr. Washington exposed her patients to a substantial risk of cancer.

Sad.

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