A New York-based director of operations and sales for the Northeast region of a mobile medical diagnostics company pleaded guilty on June 11, 2025, in federal court in Boston, to conspiring to offer and pay kickbacks to doctors in exchange for ordering medically unnecessary brain scans.
From approximately March 2015 through approximately September 2020, the defendant conspired with others, including two managers for a mobile medical diagnostics company that performed transcranial doppler (TCD) scans, to enter into kickback agreements with various doctors. TCD scans are used to measure blood flow in parts of the brain.
The defendant and his alleged co-conspirators agreed to offer and pay doctors kickbacks, some in cash and others by check, based on the number of TCD ultrasounds the doctors ordered. To disguise these payments, they created sham rental and administrative service agreements. On paper, these agreements appeared to compensate doctors for the TCD company’s use of office space and administrative resources at fair market value. In reality, the payments were tied to the volume of referrals.
The scheme resulted in approximately $70.6 million in fraudulent bills submitted to Medicare. Of that amount, Medicare paid about $27.2 million to the TCD company.
The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum sentence of five years in prison, three years of supervised release, and a fine of up to $250,000. Sentencing will be determined by a federal district court judge in accordance with the US Sentencing Guidelines and applicable statutes.
Compliance Perspective
Issue
All medical services provided to residents must be medically necessary to be eligible for reimbursement by Medicare, Medicaid, or private insurers. A service is considered medically necessary when it is essential for diagnosing or treating an illness, injury, condition, disease, or its symptoms. Submitting claims for unnecessary services may violate the False Claims Act and could result in significant penalties, including fines, criminal charges, and other sanctions. Under federal and state Anti-Kickback Statutes, it is illegal to offer, pay, solicit, or receive anything of value to induce or reward referrals involving federal or state healthcare programs. While some industries permit referral rewards, such practices are criminal in healthcare. This prohibition applies equally to those offering kickbacks and those receiving them. Kickbacks can take various forms—such as cash, bribes, rebates, or other benefits. Failing to promptly report known or suspected kickbacks may lead to serious legal consequences, including lawsuits, fines, and additional sanctions.
Discussion Points
- Review and update your policies and procedures related to medical testing services, billing practices, and safeguards to prevent and detect violations of the False Claims Act and the Anti-Kickback Statute.
- Provide training to staff responsible for determining medical necessity, ensuring they understand how to assess whether services are reasonable and supported by documentation. Train all staff on recognizing potential kickbacks and understanding their obligations under the Anti-Kickback Statute, including mandatory reporting protocols for suspected violations.
- Conduct audits to evaluate staff understanding of medical necessity and anti-kickback compliance. Emphasize that reporting is essential regardless of whether the actions were intentional or unintentional.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*