United States v. Millennium Radiology, Inc. (Summary)

FALSE CLAIMS/ANTI-KICKBACK

United States v. Millennium Radiology, Inc., No. 1:11cv825 (S.D. Ohio Sept. 30, 2014)

fulltextThe United States District Court for the Southern District of Ohio denied the motions to dismiss of two hospitals and their exclusive radiology group in a lawsuit brought by a former physician employee, as a relator on behalf of the government, who alleged that the hospitals and group violated the Anti-Kickback Statute and the False Claims Act.

The relator alleged that the radiology group provided medical director and marketing services to the hospitals free of charge in exchange for the exclusive right to provide radiology services at those hospitals.

In denying the hospitals’ and group’s motions to dismiss, the court rejected their arguments that the relator had not sufficiently alleged that the hospital received remuneration from the hospitals. The court noted that anything of value could constitute “remuneration” and, while the relator had not provided much detail of the remuneration, the fact that the hospital received medical director and marketing services from the group for free means that those services were necessarily provided at below market rates. Further, while the overall arrangement between the hospitals and group should be considered, rather than focusing on the mere fact that no separate compensation was paid to medical directors, the court found that the relator’s allegations were sufficient to survive dismissal. The court also held that the relator sufficiently alleged wrongful intent on the part of the hospitals and group when he claimed that the corporation had been advised by counsel that an exclusive arrangement requiring medical director services to be provided for free could be illegal.