Cardiac Imaging: Paying for Supervision While Doctors Were Elsewhere

In the Cardiac Imaging Inc supervision fees settlement, the company and its founder agreed to pay a fixed $85,480,000, with more from the company tied to its future revenue, over allegations that it paid referring cardiologists excessive fees to supervise mobile PET scans. Cardiac Imaging agreed to pay $75 million and additional amounts based on future revenue; its founder separately agreed to pay $10,480,000. A former billing manager brought the whistleblower case. The question inside the business was concrete: whose time was the company paying for when the scanner was running?

The Justice Department announced the settlement on October 10, 2023. Cardiac Imaging, headquartered in Illinois, provided mobile cardiac positron emission tomography scans. These nuclear medicine tests help doctors assess heart function and diagnose cardiac disease. According to the government, the company paid referring physicians to provide the supervision Medicare required for the scans. Its mobile scanning units kept running during hours when those physicians were treating other patients in their offices or were not even on site, the government alleged.

Supervision Fees Followed the Scanner’s Hours

Cardiac Imaging allegedly paid referring cardiologists $500 or more per hour for supervision. The government said the company paid for every hour it spent scanning a cardiologist’s patients, including hours when that doctor was elsewhere treating other patients or was not on site.

According to the government, the fees substantially exceeded the fair market value of the services the cardiologists provided.

The allegation went beyond the hours counted. The government said the fees also paid for additional services beyond supervision that the cardiologists did not actually provide.

For someone working in mobile imaging, that makes the way hours were counted as important as the hourly rate. We examine the scan schedule alongside the physician’s office schedule and the payment calculation.

How a Supervision Payment Reached a Federal Claim

The government alleged that excessive supervision compensation bought referrals that produced false or fraudulent claims to federal health care programs. It said the company’s founder oversaw and approved the arrangements, and placed the conduct between March 1, 2014, and May 31, 2023.

Cardiac Imaging provided the scans and sought payment for them. In this alleged arrangement, money also moved back to the referring physician through the supervision fee. Patients depended on the referral decision, while Medicare and other federal health care programs faced the bills it generated.

The settlement addressed alleged violations of both the Anti-Kickback Statute and the Stark Law. The kickback allegation concerned paying doctors to send business. The Stark allegation concerned billing for services referred through a prohibited financial relationship. The Justice Department’s account of the companion complaint explains that the latter can include a compensation arrangement between the provider and the referring physician.

A 2020 review in the Journal of Forensic and Investigative Accounting, A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, explains that the False Claims Act reaches the request for payment. Here, the government alleged that excessive supervision payments induced referrals that generated false or fraudulent imaging claims.

A Valuation Built on the Wrong Work

According to the Justice Department, Cardiac Imaging pointed to a consultant’s fair market value analysis to justify the fees. The government alleged that the company knew the analysis rested on fundamental inaccuracies about the services the referring doctors provided and said the consultant ultimately withdrew it.

The Justice Department’s account of the companion complaint sharpened that point: cardiologists allegedly received compensation as though they were fully occupied supervising scans while actually caring for other patients. An analysis built around a fully occupied doctor values a different service from the one that account describes.

The valuation file also matters because of the additional services supposedly included in the fee. We look at the work assigned to each part of the payment and the basis for saying it was performed. A detailed job description can make compensation look justified even when the described work never occurs.

We compare the assumptions in a valuation with the agreements, schedules and work behind the payments. We also examine what the company knew about discrepancies and how it responded.

The same comparison matters in medical device fraud involving consulting fees. In device consulting arrangements, work not performed, time not recorded and payments exceeding fair market value expose the gap between the contract and the work. Whether the stated job is consulting or scan supervision, we examine what the physician actually did for the payment.

What the Settlement Required

The Justice Department said both settlements reflected the defendants’ ability to pay.

Cardiac Imaging and its founder also entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General requiring measures to address arrangements with referring physicians under the Anti-Kickback Statute and the Stark Law.

The Former President’s Alleged Role

The government also joined the billing manager’s case against the former president and co-owner, who had served as chief financial officer.

The government alleged that, from at least 2017 through June 2023, the executive caused Cardiac Imaging to enter compensation arrangements that paid cardiologists as though they were fully occupied supervising scans. The complaint alleged that he knowingly played a central role in the scheme.

For an insider, that adds the decisions behind the arrangements to the evidence about hours and payments: who approved the compensation and what they understood about the work.

What Evidence Is Needed to Prove Fraud?

For a supervision fee case, the evidence connects physician compensation, actual work, referrals and the resulting government claims. Scan schedules, physician schedules and records of additional services let us compare the promised supervision with the work actually performed.

The valuation adds another comparison: what the consultant understood about the work versus what the company knew. The referral and billing records then connect the arrangement to the patients sent for scans and the claims submitted for those services. We build the case around those connections with the insider who understands them.

Whistleblower Rewards for Imaging Fraud

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Cardiac Imaging case began with a billing manager’s whistleblower action. An insider’s understanding of how the payments and claims fit together is where our work with them starts.

You Know Who Was There

If you know why the supervision payments kept running while a doctor was elsewhere, talk with our whistleblower experts about the arrangement. We connect your knowledge of the schedules, compensation and billing to a healthcare fraud case and bring in whistleblower lawyers who know physician compensation and imaging cases. We stay beside you throughout the process and work to build your strongest imaging whistleblower case.