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The Reading Room

Arrests made in New Jersey kickback scheme

Michael Song, Imaging Performance Partnership

Fourteen health care practitioners across New Jersey were arrested this week on charges of participating in a bribery scheme to steer patient referrals to a community MRI center.  The arrests follow an investigation by the Office of the Inspector General that uncovered bribes made by directors at the Orange Community MRI Center to referring physicians.

The bribes, which in certain cases exceeded $5,000 per month, violate the The Medicare and Medicaid Patient Protection Act of 1987 (more commonly known as the Anti-Kickback Statute), which prohibits physicians from soliciting or receiving remuneration in exchange for referring patients.  If convicted, the defendants could face up to five years in prison in addition to a fine equal to the larger of $250,000 or twice the gross kickback amount.

Given volume pressures and negative reimbursement trends within the industry, imaging leaders may not be surprised by some defendants’ claims that the imaging center in question needed to secure more volumes in order to remain viable.  However, regulatory enforcement of the anti-kickback statute has not been limited to these arrests, suggesting that non-compliance could prove costly.  Last year, for example, two hospitals in Ohio paid the U.S. Department of Justice a record-setting $108 million to settle charges that they paid kickbacks to physicians for referring patients to their cardiac centers.  

Understandably, imaging departments are under increasing pressures to secure and grow volumes as imaging utilization endures continuing scrutiny.  For tactics on securing growth, please see our previous publication on Advancing Imaging Referral Strategy.  Additionally, part of the Partnership’s research this year will address how imaging leaders can adapt to this changing landscape with studies focused on the role of the radiology department as well as radiologists within the care continuum.  Please feel free to contact us should you have any comments or would like to contribute to our research.