The complaint filed recently in United
States District Court in Los Angeles accuses The Oaks
Diagnostics, Inc. (doing business as Advanced Radiology of
Beverly Hills), its owner, Ronald Grusd, M.D., and internal
medicine practitioner Earl Fernando, M.D. of defrauding
federal health care programs.
The lawsuit alleges that the defendants
engaged in a scheme to fraudulently bill Medicare for
unnecessary tests performed at Advanced Radiology. As part of
the alleged scheme, an Advanced Radiology employee recruited
Medicare beneficiaries to undergo diagnostic tests at Advanced
Radiology even though the beneficiaries did not need the
tests.
Unnecessary tests allegedly were also
performed on patients allegedly referred by Fernando. The
complaint alleges that Advanced Radiology submitted claims to
Medicare for unnecessary diagnostic services rendered to 438
Medicare beneficiaries and that Medicare paid Advanced
Radiology more than $600,000 for these services. Under the
False Claims Act, the United States may recover three times
the amount of its losses plus penalties.
Recently, an Advanced Radiology
employee allegedly involved with the scheme, Nordelyn Lowder,
pleaded guilty to one count of health care fraud in connection
with the fraud scheme. Lowder admitted that she received more
than $500,000 over a four-year period in exchange for
referring patients to Advanced Radiology.
Lowder is scheduled to be sentenced by
United States District Judge Florence-Marie Cooper on June 2,
at which time she faces a maximum statutory penalty of 10
years in federal prison.
The "whistleblower" lawsuit was
originally filed in 2003 by a former Advanced Radiology
employee under the qui tam provisions of the False Claims Act,
which allows a private party to file an action on behalf of
the United States and receive a portion of the recovery.
The United States first filed a notice
of intervention on Feb. 12. In April 2008, the government
filed its lawsuit which takes the place of the original qui
tam complaint filed in 2003.
This case was investigated by the
Department of Health and Human Services, Office of Inspector
General, and the Federal Bureau of
Investigation.