Illinois AG re-files lawsuits in MRI kickback schemes

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The Office of Illinois Attorney General (AG) Lisa Madigan has re-filed civil lawsuits against MRI centers suspected of involvement in kickback schemes after a circuit court judge ruled on Sept. 11 that more details were needed for the complaint to move forward.

Madigan’s attorneys said they expect to file five cases, grouping them by ownership. Each grouping will provide more details against companies or the more than 20 centers they operate, Madigan's office said.

"We have put more meat on the bone with more specifics," said Paul Gaynor, chief of special litigation for the AG’s office.

Madigan’s office previously filed a whistleblower lawsuit earlier this year against several Chicago area radiology centers for alleged payments of illegal kickbacks to referring physicians. The complaint claimed that 11 radiology companies operating in 19 centers in the Chicago area entered into “sham ‘lease’ agreements” to pay physicians for MRI and CT scan referrals.

The state attorneys said they have also reached one of three settlements with smaller MRI center operators that calls for an end of certain practices believed to increase costs to consumers but do not include admissions of wrongdoing.

In the settlement disclosed last week, Central States Imaging of Lake in the Hills, Ill., reached an agreement that prohibits the company from entering into agreements in which a physician leases the company's space, equipment and personnel for a less than what the physician or Central States bills the patient or the patient's insurer for those services. The imaging center had five such lease agreements since Jan. 1, 2002, according to court records.

Central States agreed to pay nearly $40,000 to a compliance fund set up by Madigan's office and another $24,545 to John Donaldson, the MRI center operator, who initially brought the civil suit and was subsequently joined by the state in 2006.