Federal and local law enforcement agents have arrested 14 healthcare practitioners in New Jersey for allegedly accepting kickbacks for patient referrals to an MRI center in the state. Authorities charge that Orange Community MRI paid healthcare providers for referrals of Medicare and Medicaid patients, in violation of federal law.
The raids included more than 65 federal and local agents, with those arrested ranging from referring physicians to a nurse practitioner, according to a press conference held at the U.S. Attorney's Office in Newark, NJ. Chirag Patel, Orange Community MRI's executive director, was arrested on December 8 prior to the raids and released on a $750,000 bond.
Authorities charge that Orange Community MRI began making payments to healthcare providers in exchange for patient referrals as early as 2010. At the end of each month, the center allegedly printed patient reports that indicated how many imaging exams each of the defendants had referred. These reports were used to calculate payments owed to each defendant, according to the U.S. Attorney's Office.
The healthcare providers were allegedly paid for Medicare and Medicaid referrals, as well as for referrals of patients covered by private insurance. The amount of the payments differed for each of the defendants, according to a complaint: Some physicians were only paid for MRI and CT studies, while others were paid for referring patients for ultrasound and echocardiography studies, as well as dual-energy x-ray absorptiometry (DEXA) scans.
The complaint states that during one two-month period between early October and early December 2011, Orange Community MRI made 32 separate payments to the defendants, worth a total of $51,500. All of the defendants other than Patel and the nurse practitioner are medical doctors, and they allegedly received payments ranging from $200 to more than $5,000 per month.
Each of the defendants is being charged with one count of violating the federal healthcare program and antikickback statute by soliciting and receiving bribes. The offense carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Patel is also charged with violating the same statute and with paying bribes, which carries the same maximum penalty.
Witness with a wire
The investigation began in the summer and was led by agents from the U.S. Department of Health and Human Services' Office of Inspector General. The complaint against Patel charges that on November 1, 2010, he met with and offered a kickback to a healthcare practitioner who was cooperating with authorities as a witness and who wore a wire recording the conversation during the meeting.
Patel allegedly told the witness that Orange Community MRI would pay $75 for each Medicare or Medicaid beneficiary referred to the center who received an MRI or CT scan, and $100 for each privately insured patient.
When discussing payment for ultrasound exams, Patel allegedly told the witness that the center would need a large volume of referrals: "You know, we can't just do four or five ultrasounds ... [s]ee, look doctor, end of the day, you and me are businessmen," the complaint quotes Patel as saying. Patel allegedly said that 25 to 30 scans a month was an acceptable number of ultrasound referrals, according to the complaint.
During the meeting, Patel allegedly handed the witness an envelope containing $1,800 in cash, which he said was the witness' September payments. Patel also allegedly told the witness that he would increase MRI payments to $100 in exchange for a higher volume of referrals.
Other complaints filed by authorities detail the alleged arrangements that Orange Community MRI had with each of the healthcare practitioners who were arrested today. Several of these practitioners had meetings with a witness who was cooperating with investigators by claiming to represent Orange Community MRI.
In one case, a witness handed one of the plaintiffs, Dr. Shashi Agarwal, an envelope with $2,600 in cash, which covered payments for 14 MRI and 16 CT scans performed on Medicare/Medicaid patients during September 2011. At the time, Agarwal, a physician practicing internal medicine and cardiology in East Orange, NJ, reportedly complained about how slow his referral business was, and hoped that it would "pick up" in October.
Another complaint details the case against Dr. John Green, a physician practicing gastroenterology in West Orange, NJ. The complaint charges that like other practitioners, Green began receiving cash payments in exchange for referrals in 2010; some of these payments were made by a witness cooperating with federal investigators.
Other practitioners charged in the case include Lucio Cardoso of Arlington; Jose Castaneda of Clifton; Daisy Deguzman of Livingston; Maryam Jafari of Hoboken; Rameshcha Kania of Livingston; Yash Khanna of Livingston; William Lagrada of Edison; and Chikezie Onyenso of Randolph. All of the defendants arrested this morning are scheduled to appear this afternoon in the U.S. District Court of New Jersey.
Representatives of Orange Community MRI declined to comment on the charges as of press time.
