Scanning for Medicare Fraud

close up of word medicare block letter

You’ve probably heard or seen advertisements for body scan services that provide early detection of potentially life-threatening disease. Doctors use 3D images of your body to look for early signs of heart or vascular disease, or cancer. Sometimes during the process, radiologists also detect cysts, aneurysms, gallstones or kidney stones, even though you may feel fine and are not experiencing any symptoms at all.

William M. Kelly, founder and medical director of Health Scan Imaging in Southern California, offers body imaging services in addition to 3D CT scans, bone density testing, high-field MRI, mammography, nuclear medicine, ultrasound, x-ray and open MRI services at 11 tropical tiki themed Southern California locations. Many of these services were provided to Medicare beneficiaries, although they were allegedly not performed in accordance to Medicare rules.

Under the whistleblower provision of the False Claims Act, a former consultant filed a lawsuit with the U.S. Department of Justice alleging Dr. Kelly submitted claims to Medicare for unsupervised radiology services and services provided at unaccredited facilities. Medicare requires that procedures, such as CT and MRI scans which involve materials to be injected into the veins, be performed under “direct physician supervision,” which means a doctor must at least be in the office while the procedure is performed. (The company’s website lists Dr. Kelly as the only physician for all 11 facilities. Correct me if I’m wrong, but it’s really hard to be in 11 places at one time.)

While Dr. Kelly is innocent until proven guilty, note that if he is found guilty of Medicare fraud, he could be subject to paying monetary damages to those impacted, as well as other penalties. Under the whistleblower provision of the False Claims Act, the former consultant can receive a share of the monetary recovery if Kelly is found guilty of committing Medicare fraud. (If only these scanning services could be used to detect the early warning signs of fraud, larege amounts of government benefits could be spared.)

Today’s Fraud of the Day comes from an article, “Radiology business with four Coachella Valley facilities sued for Medicare fraud,” published by Desert Sun on May 24, 2020.

The United States Department of Justice has intervened in a Medicare fraud case involving 11 radiology facilities in Southern California, including four in the Coachella Valley.

William M. Kelly, founder and medical director of Health Scan Imaging, allegedly violated the False Claims Act by submitting payment claims to Medicare for unsupervised radiology services and for services provided at unaccredited facilities, according to a press release by the Department of Justice.



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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.