Doctors receive $130k for Exposing Illegal Medicare Kickback Scheme


Medicare Kickback Scheme

On August 14, 2012, the Department of Justice reported that it had recovered $650,000 and settled claims against Dr. Jack L. Baker, a prominent Houston radiologist, for allegations that he violated the False Claims Act, the Anti-Kickback Statute, the Stark Act and the Texas Medicaid Fraud Prevention Act. The Justice Department awarded two doctors, Drs. Philip Blum and David Spinks, $130,000 for their contribution in providing the U.S. Government with insider information on Dr. Baker’s illegal payment compensation scheme to doctors to induce them to refer patients to Fairmont Diagnostic Center and Open MRI Inc.

The Stark Statute and the Anti Kickback Statute disallows Medicare providers from billing Medicare for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions. United States Attorney Kenneth Magidson stated that “improper financial relationships between health care providers and their referral sources can corrupt a physician’s judgment about the patient’s true healthcare needs” and such arrangement “incentivize physicians to make referrals for unnecessary tests.”

In this case, Dr. Baker had entered into improper financial relationships with approximately 17 physicians to induce them to refer patients to Fairmont Diagnostic Center for a wide variety of imaging studies. The prohibited financial relationships included, sham personal services contracts (medical directorships) and contracts to pay the salaries of employees in physicians’ offices.

The False Claims Act allows private citizens to sue on behalf of the government and share in any amounts recovered through legal action.For their work, Drs. Blum and Spinks received 20% of the proceeds of the settlement. Dr. Baker also agreed in the settlement to a voluntary suspension from the Medicare and Medicaid programs for a period of six years and will not be allowed to bill these programs for treating Medicare and Medicaid beneficiaries.

Young Law Group, P.C., Attorneys-at-Law, represents whistleblowers nationwide. For a free confidential consultation, please call Eric L. Young, Esquire at 1-800-590-4116 or contact one of our other False Claims lawyers.