Diagnostic Imaging Group (DIG) has agreed to pay 13.65 million dollars to the government and an additional 1.85 million dollars to New York and New Jersey to resolve theallegations.
The allegations were raised in three lawsuits brought by private individuals in 2009 and 2010 in federal courts under the whistleblower provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.
The three whistleblowers would receive a total of about 2.77 million dollars under the settlement.
The claims settled by the agreement are allegations only, and there has been no determination of liability.
DIG was founded in 1985 by Mumbai-native Leena Doshi, who came to the US in 1973 and studied radiology at a city hospital. Doshi's husband Nitin Doshi was a dentist before joining his wife to expand the radiology practice.
The couple has not been charged or accused of any wrongdoing.
Incidentally, the husband-wife duo has in the past been awarded with the Ellis Island Medal of Honor, which is given to immigrants for their contributions to America.
"Fraud committed by medical practices costs New York taxpayers millions of dollars every year. My office will find those who cheat the system, cheat New Yorktaxpayers and cheat our most vulnerable patients," New York Attorney General Eric Schneiderman said in a statement.
"In addition to other fraud, these companies were suspected ofpaying kickbacks. This illegal behaviour must and will stop."
The settlement resolves allegations that DIG submitted claims to federal healthcare programme Medicare, as well as the New Jersey and New York MedicaidProgrammes.
Between 1999 to 2010, the companies submitted false billings for expensive imaging services such as ultrasounds, doppler scans, ultrasounds and pelvic x-rays.
Additionally, DIG allegedly bundled certain tests on its order forms so that physicians could not order other tests without ordering the additional bundled tests, which were not medically necessary.
In all, more than 40,000 false claims were submitted to the New York Medicaid program for the various imaging services.