Cardiac Imaging Agrees to $85.5 Million Settlement

According to the U.S. Attorney for the Southern District of Texas, Cardiac Imaging Inc. (CII) and its CEO, Sam Kancherlapalli, will pay $85.5 million to settle a kickback case brought under the federal False Claims Act. CII, based in Illinois, provides mobile and fixed-site cardiac PET scans nationwide. “PET” stands for positron emission tomography, a type of imaging test. The settlement resolves allegations that CII violated the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (Stark Law).

Whistleblower Allegations in the False Claims Act Case

Lynda Pinto, a former billing manager at CII, filed a whistleblower case in the Southern District of Texas in 2018. The allegations against CII and Kancherlapalli spanned from March 2014 to May 2023. According to the whistleblower, CII knowingly submitted false and/or fraudulent claims to federal healthcare programs. Specifically, the whistleblower accused CII of paying fees of$500 or more per hour to referring cardiologists for supervising PET scans. Allegedly, these fees were well above fair market value and included compensation for services not rendered or did not constitute supervision.  Moreover, CII allegedly relied on a consultant’s fair market value analysis that it knew was based on inaccurate information. An analysis that the consultant ultimately withdrew.

Cardiac Imaging Agrees to Corporate Integrity Agreement

This settlement is the largest of its kind in the history of the Southern District of Texas.  CII will pay $75 million upfront, with additional payments tied to future revenues. In addition, CII’s CEO Kancherlapalli will pay $10.5 million.

As part of the settlement, CII and Kancherlapalli agreed to a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General (DHHS-OIG). This agreement mandates various compliance measures, including ensuring that arrangements with referring physicians adhere to the AKS and the Stark Law, implementing an annual risk assessment, and retaining an Independent Review Organization to evaluate arrangements.

Paying illegal kickbacks to cardiologists so they refer patients undermines the integrity of federal healthcare programs and needlessly increases costs. Patients deserve care based on their medical need and not on a doctor or company’s financial interest or gain. This outcome emphasizes my office’s commitment to pursing justice, ensuring the public’s trust in the federal healthcare system and holding the corrupt accountable.

– Alamdar Hamdani, U.S. Attorney for the Southern District of Texas in announcing the settlement.

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