Texas Diagnostic Imaging Service Settles FCA Allegations for $3.5 Million; Whistle-Blower to Receive $596,700
A recent settlement illustrates the substantial recovery available to whistle-blowers under the FCA’s qui tam provisions. Those provisions allow a qui tam plaintiff to receive typically between 15 percent and 25 percent of the proceeds of an FCA settlement. 31 U.S.C. § 3730(d).
The settling party—Preferred Imaging—is a Dallas-based company that operates independent diagnostic facilities in Texas, Illinois, and Kansas. Preferred Imaging performs procedures involving the administration of contrast dye, an activity requiring supervision from an on-site physician pursuant to 42 C.F.R. § 410.32(b)(3).
On December 30, 2014, Tracy Sifuentes filed a qui tam action against Preferred Imaging in the United States District Court for the Northern District of Texas, captioned United States ex rel. Tracy Sifuentes v. Preferred Imaging Centers, LLC, Civil Action NO. 3:14-CV-04555-M. Thereafter, the United States and Texas also asserted claims against Preferred Imaging.
The allegations against Preferred Imaging related to the company’s submission of claims for payment to Medicare and Medicaid for procedures performed between January 1, 2009 and February 26, 2016. As did the qui tam plaintiff, the United States and Texas contended that Preferred Imaging submitted claims for procedures that were performed without the presence of an attending physician and without direct supervision, in violation of 42 C.F.R. § 410.32(b)(3).
While denying any wrongdoing, Preferred Imaging agreed to pay a total of $3,510,000 to settle the allegations against it. Of that amount, the qui tam plaintiff will receive $596,700. His recovery represents 17 percent of the overall settlement, at the low end of the allowable range under section 3730(d) of the FCA.