PET Scan Provider to Pay $8.3M to Resolve Allegations of Kickbacks and False Claims Act Violations
By the Constantine Cannon Whistleblower Team
California-based medical scan provider, Modern Nuclear Inc. (MNI), agreed to pay $8,334,350, and additional money based on future revenue, to resolve allegations that it violated the False Claims Act by paying referring cardiologists hefty fees to supervise positron emission tomography (PET) scans, in violation of the Anti-Kickback Statute.[1]
What Did the Alleged Scheme Entail?
From September 2016 to January 2025, MNI allegedly submitted false or fraudulent claims to federal healthcare programs. MNI purportedly paid kickbacks to referring cardiologists, in the form of above fair market value fees for cardiologists to supervise PET scans for patients who were referred to MNI.[2]
How Did the Fees Allegedly Exceed Fair Market Value?
The fees exceeded fair market value for the cardiologists’ services because MNI compensated referring cardiologists for time spent treating other patients in their own offices, for periods when they were not on site, and for other services that were not performed.
MNI claimed it relied on an attorney opinion letter regarding fair market value that the United States alleged was founded on inaccuracies and which was later withdrawn by the consultant.[3]
What Did MNI Agree to in Addition to the Settlement?
In addition to the settlement, MNI has entered into a five-year corporate integrity agreement (CIA) with the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). The agreement obligates MNI to implement measures to ensure that its arrangements with referring physicians comply with the Anti-Kickback Statute.
According to the agreement, MNI is also required to implement a compliance program to identify and tackle Anti-Kickback Statute risks arising from other financial arrangements and to have an Independent Compliance Expert evaluate the program’s effectiveness.[4]
Were Whistleblowers Involved?
As with many healthcare fraud cases, this settlement resolves claims brought by whistleblowers. Under the qui tam (or whistleblower) provisions of the False Claims Act, relators (or whistleblowers) may file lawsuits on behalf of the government and receive a portion of the monetary recovery. In this case, relators Matt Lieberman and James Whitney will receive 16% of the recovery.[5]
Comments on the Case
First Assistant United States Attorney Bill Essayli commented: “Paying illegal kickbacks to doctors so they refer patients undermines the integrity of federal health care programs and needlessly increases costs. Patients deserve care based on their medical need and not on a doctor or company’s financial interest.”[6]
Constantine Cannon Whistleblower Practice Group Intake Partner Alysia Solow commented: “Healthcare fraud schemes harm public trust and drain critical resources. The government counts on whistleblowers to speak up if they have any knowledge of healthcare fraud or misconduct and often pays rewards in successful False Claims Act matters to encourage such reporting.”
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Sources:
[1] See https://www.justice.gov/usao-cdca/pr/oc-medical-scan-provider-agrees-pay-83-million-resolve-false-claims-allegations-it.
[2] See https://www.justice.gov/opa/pr/mobile-pet-scan-provider-pay-833-million-resolve-allegations-false-claims-act-violations.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
Tagged in: Anti-Kickback and Stark, False Claims Act, Healthcare Fraud, qui tam,