Illinois settles anti-kickback cases over MRI leasing deals

Illinois Attorney General Lisa Madigan in January settled anti-kickback cases against more than a dozen radiology clinics over alleged illegal MRI leasing arrangements.

The move was part of a larger investigation targeting nearly 20 facilities for allegedly paying illegal kickbacks to doctors in exchange for referring patients to certain centers.

Medical and legal experts said the lawsuit apparently is the first large-scale state effort to target the arrangements, which also have sparked scrutiny by the federal government.

"When patients are referred to MRI facilities, they should be able to feel confident that the referrals were made for medical reasons only," Madigan said. "This settlement sends a strong message that medical professionals cannot engage in schemes to line their pockets at the expense of providing the best patient care."

Virginia-based MIDI LLC, which operates 14 MRI centers in the Chicago area, will pay $1.2 million under the deal. Of that sum, $840,000 will help fund state grants for health care services for low-income residents. The remainder will go to a whistle-blower who initiated the lawsuit.

The case focused on what the government has viewed as a potentially abusive type of leasing agreement that could disguise unlawful compensation and lead to unnecessary patient testing. Under such deals, doctors typically lease time on imaging equipment for a discounted rate. The physician or testing facility then bills for the full amount of the service, and the referring physician receives the difference.

The recent settlement expressly prohibits MIDI radiology centers from entering into such arrangements. The facilities admitted no wrongdoing in the agreement, which awaits court approval. Five other imaging companies named in the original lawsuit settled earlier, also without admitting any misconduct.

American Medical Association policy supports physician disclosure of any financial relationships when referring patients. AMA ethical guidelines do not allow doctors' involvement in leasing arrangements that are contingent upon referral activities.