Radiologists blow whistle on hospital for alleged monopoly and kickbacks

Two radiologists have filed a federal whistleblower lawsuit accusing Bozemen Health Deaconess Hospital of illegally conspiring to maintain its monopoly on radiology services, leading to fraudulent bills being submitted to Medicare and Medicaid.

Frank Rembert and Michael Page allege that Intercity Radiology “î which contracted with the hospital in 2002 wanted to open an outpatient imaging center, to competed with the hospital for patients. The center would have offered lower prices, better office hours and faster service in a more convenient location, the lawsuit says. The lawsuit accuses the hospital of creating a joint venture with Intercity Radiology and agreed to refer patients to the joint venture in exchange for millions of dollars in kickbacks. The hospital owned 77.5 percent of the joint venture, called Advanced Medical Imaging, the lawsuit said. The hospital’s partnership with Intercity Radiology included a clause that prevented its employees from participating in any other outpatient imaging center.

The resulted in millions of dollars in fraudulent claims being paid to the hospital and AMI by Medicare, Medicaid and other federal health care programs, according to the lawsuit.

Bozeman Health began tracking and controlling the volume of referrals it sent to Advanced Medical Imaging and deliberately overused procedures, leading to more fraudulent claims, the lawsuit alleges.

The False Claims Act allows private individuals to file lawsuits over fraud against the government and collect a percentage of any damages awarded. The lawsuit alleges the joint venture also violated the Federal Anti-Kickback Statute. The hospital and Advance Medical Imaging have until Nov. 21 to file an answer to the complaint.

Jeffrey Newman represents whistleblowers , none in this case.