Illinois Attorney General Lisa Madigan. Image Source: Kids in Danger

Illinois Attorney General (AG) Lisa Madigan has reached a $1.2 million settlement with a group of 14 Chicago-area radiology centers that allegedly paid illegal kickbacks to doctors in exchange for referrals.

The settlement, entered in court on Wednesday, is the result of a lawsuit filed by Madigan in 2007, and requires the defendants to stop paying the kickbacks and to pay money damages, restitution and penalties.

Under the settlement, MIDI LLC and 14 Open Advanced MRI centers will pay a total of $1.2 million to settle the state’s lawsuit. Illinois’ share—$840,000—will be distributed in grants to benefit low income residents in need of healthcare services. The settlement also explicitly prohibits the radiology centers—11 of which are still open—from operating under any kickback agreements with referring physicians in Illinois.

“This settlement sends a strong message that medical professionals cannot engage in schemes to line their pockets, at the expense of providing the best patient care,” Madigan said.

In 2007, Madigan intervened in a lawsuit against various radiology centers and then filed an amended complaint against the centers. The lawsuit alleged that the radiology centers entered into sham “lease” agreements with doctors, under which the doctors paid a reduced rate for MRI and CT scans, charged the patient’s insurance carriers a higher rate, and then pocketed the difference, according to the AG’s office.

In addition to the MIDI settlement, Madigan has settled with five other imaging companies, as she expanded the civil suit to 10 MRI centers in September 2007.

Madigan's office said it was continuing to investigate the issue of whether doctors were knowingly involved with the scheme.