Montana hospital paid $10M to settle radiology fraud lawsuit

Unsealed court documents have provided new information about a federal lawsuit settled by Bozeman Health Deaconess Hospital in Bozeman, Montana, in November 2018.

The documents show that the hospital paid $10 million to settle the lawsuit, according to reporting from the Bozeman Daily Chronicle. The hospital paid $7.5 million to the federal government. The U.S. kept about $7.2 million of that money and another $238,820 went to Montana. A percentage of the money was paid to radiologists Frank Rembert and Michael Paradise, who filed the lawsuit and claimed the hospital made millions in “fraudulent claims to government health care programs as part of an illegal kickback scheme to keep a monopoly on radiology services.” The hospital also paid $2.5 million to Rembert and Paradise’s attorneys.

The suit noted that Intercity Radiology allegedly wanted to open its own outpatient imaging center, which would have competed with the hospital’s radiology department by offering “low prices, better office hours and faster service in a more convenient location.” The hospital convinced Intercity Radiology to engage in a joint venture with the hospital—and named it Advanced Medical Imaging, according to the suit. The partnership would have prevented its employees from being employed in another outpatient imaging center. Additionally, the hospital would have referred all outpatients to Advanced Medical Imaging for imaging studies—and the hospital wanted to be paid for the referrals.

Though the suit was settled, the defendants claim they did nothing wrong. 

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