LOS ANGELES (LN) — Modern Nuclear Inc. agreed Friday to pay $8.33 million, plus additional amounts based on future revenues, to resolve False Claims Act allegations that it paid unlawful kickbacks to referring cardiologists of excessive supervision fees for mobile positron emission tomography scans.
The settlement resolves claims that between Sept. 1, 2016, and Jan. 14, 2025, the La Habra, California-based provider knowingly submitted false claims to federal health care programs by violating the Anti-Kickback Statute.
According to the Justice Department, Modern Nuclear paid referring cardiologists fees that substantially exceeded fair market value for their supervision services. The government alleged the company paid physicians for time spent in their offices caring for other patients or while they were not on site at all, as well as for additional services that were never or rarely provided.
The United States alleged Modern Nuclear purported to rely on an attorney opinion letter regarding fair market value that was premised on fundamental inaccuracies and that the consultant ultimately withdrew.
The resolution includes a five-year Corporate Integrity Agreement with the Health and Human Services Office of Inspector General. The agreement requires Modern Nuclear to implement measures ensuring arrangements with referring physicians comply with the Anti-Kickback Statute and to retain an independent compliance expert to review the effectiveness of its compliance program.
The settlement resolves a qui tam action filed by whistleblowers Matt Lieberman and James Whitney. Under the False Claims Act, the relators will receive 16% of the total recovery.
Assistant Attorney General Brett A. Shumate said the Justice Department will continue to pursue providers that seek patient referrals through illegal kickbacks.
"We will diligently pursue and hold accountable healthcare providers that seek patient referrals through illegal kickbacks and other unlawful financial inducements," Shumate said. "By rooting out financial relationships between healthcare providers and referring physicians that corrupt the medical decision-making process, we will continue to protect and safeguard taxpayer dollars."
First Assistant U.S. Attorney Bill Essayli said paying illegal kickbacks to cardiologists so they refer patients undermines the integrity of federal health care programs and needlessly increases costs.
"Patients deserve care based on their medical need and not on a doctor or company’s financial interest," Essayli said.
The case is captioned United States ex rel. Lieberman v. Modern Nuclear, Inc., et al., in the U.S. District Court for the Central District of California.