Illinois AG names additional centers in MRI kickback lawsuit

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Illinois Attorney General Lisa Madigan. Source: Southern Illinois University  

Illinois Attorney General Lisa Madigan's office has refiled its civil fraud case against more than a dozen MRI centers, and has named as defendants MIDI LLC and affiliates that own and operate under the Open Advanced or Open MRI radiology centers.

The MIDI defendants represent the largest number of centers sued so far in the case, according to the Chicago Tribune.

The Illinois AG’s office claims that more than 20 Chicago-area radiology centers engaged in a widespread scheme to win referrals for MRIs by paying illegal kickbacks to doctors, and more cases are expected to be refiled, a spokeswoman for Madigan's office said.

The alleged scheme involving the MIDI entities resulted in health insurers being billed more than $10 million in "inflated and illegal billings.” According to the suit, the radiology centers set up illegal agreements that paid the physicians for doing little more than sending patients to the MRI centers, reported the Chicago Tribune.

The suits stated that the defendants “conceived, marketed and participated in a scheme to pay physicians for patient referrals to the defendants' medical imaging facilities. “This scheme involved the submission of false and fraudulent claims for payment of thousands of patients, private insurers and the state of Illinois,” according to the Chicago Tribune.

The suit stated that MRIs were performed at the radiology centers, though the financial arrangement made it appear that the doctors were in charge of the equipment and billed the services as their own. The Chicago Tribune reported that the AG’s office claims that the centers concocted "technical service agreements" or "MRI services agreements" to benefit the doctors, who then referred patients to the centers, sometimes for unnecessary tests.

Attorneys for the MRI centers say the partnerships were lawful. "MIDI believes it has done nothing unlawful and expects to be exonerated," said attorney Steven Miller of Reed Smith in Chicago.

The alleged kickback scheme involving the MIDI entities dates back to 2001 and involved at least 75 agreements with 33 physicians or physician groups, according to the Chicago Tribune.