Home Los Angeles Press Releases 2010 Radiology Clinic Pays $647,000 to Resolve Lawsuit Alleging It Billed Medicare for Unneeded Tests

Radiology Clinic Pays $647,000 to Resolve Lawsuit Alleging It Billed Medicare for Unneeded Tests

U.S. Attorney’s Office July 02, 2010
  • Central District of California (213) 894-2434

LOS ANGELES—The company that owns Advanced Radiology of Beverly Hills has paid the federal government $647,000 to settle allegations that it filed false claims with Medicare for unnecessary radiological tests.

The settlement was paid Wednesday by The Oaks Diagnostics, Inc., dba Advanced Radiology. The payment prompted the government to ask a federal judge this morning to dismiss a civil lawsuit that alleged Advanced Radiology performed unnecessary diagnostic tests and billed Medicare for the procedures.

The United States alleged in the civil lawsuit that Advanced Radiology and its owner, Dr. Ronald Grusd, engaged in a scheme to bill Medicare for unnecessary tests performed at Advanced Radiology from 1999 through 2002. As part of the alleged scheme, an Advanced Radiology contractor recruited Medicare beneficiaries to undergo diagnostic tests such as CT scans and MRIs, even though the beneficiaries did not need the tests. That contractor—Nordelyn Lowder—pleaded guilty to one count of health care fraud in connection with the scheme. Lowder was sentenced in June 2008 to 20 months in federal prison and was ordered to pay $426,455 in restitution.

The settlement resolves allegations initially made against Advanced Radiology in a “whistleblower” lawsuit filed pursuant to the qui tam provisions of the False Claims Act, which allow a private party to file a civil action on behalf of the United States and receive a portion of the recovery. The whistleblower lawsuit was originally filed in 2003 by a former Advanced Radiology employee. The United States intervened and took over prosecution of the case in February 2008.

Advanced Radiology paid the settlement without admitting any wrongdoing.

Dr. Grusd is not a party to the settlement, but in light of the settlement with Advanced Radiology the government has opted to dismiss the lawsuit against him.

This case was investigated by the Office of Inspector General of the Department of Health and Human Services and the Federal Bureau of Investigation.

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