Long Island's Zwanger-Pesiri Radiology to Pay Over $10 Million Over Allegations of Medicare and Medicaid Fraud

Long Island Natives Reported Systemic and Abusive Billing Practices, Including:

- performing unnecessary and excessive testing;

- purposely scheduling tests based on financial gain, not patient need;

- falsifying the identity of rendering radiologists while using the services of uncredentialed physicians; and

- charging for services not performed.

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Nov 17, 2016, 05:30 ET

WASHINGTON, Nov. 17, 2016 /PRNewswire/ -- Constantine Cannon LLP is pleased to announce that its qui tam clients Linda Gibb and Donna Geraci aided the U.S. government and the State of New York in recovering more than $10 million over allegations of systemic Medicare and Medicaid fraud by Zwanger-Pesiri Radiology, a large practice with more than 20 locations on New York's Long Island.

The settlement with Zwanger resolves a case initially brought by qui tam relators Ms. Gibb and Ms. Geraci and later joined by the federal government and the State of New York that accused Zwanger of overbilling Medicare and Medicaid. In addition, Zwanger pleaded guilty to two criminal charges of healthcare fraud.

Ms. Geraci and Ms. Gibb, who were billing specialists at Zwanger, are represented by Constantine Cannon attorneys Timothy McCormack and Molly Knobler and co-counsel Mitchell J. Birzon, a partner at Birzon, Strang & Associates in Smithtown, New York.

Soon after joining Zwanger in 2010, Ms. Geraci discovered that the company regularly falsified Medicare and Medicaid claims for services rendered by uncredentialed physicians or at unenrolled practice locations. Senior executives directed her to do whatever was necessary "to get the claims paid." Despite her warnings that this constituted fraud, Zwanger continued to engage in its schemes.

Similarly, Zwanger executives ordered its schedulers to "split up" certain tests, i.e. schedule them on different days, no matter how inconvenient and contrary to patients' needs, because Zwanger was paid more when the tests were split.

Ms. Gibb complained repeatedly about these and other improper practices, such as automatically performing pelvic and transvaginal ultrasounds — an extremely invasive physical exam — on female patients when their treating physicians had ordered only one of these tests.

Under Dr. Mendelsohn's direction, Zwanger created multiple systems to automatically implement its fraudulent schemes. For example, when patient tests were ordered, Zwanger's computer systems automatically scheduled additional tests that the patient's treating doctor had not requested. In addition, when an unenrolled physician performed services, the computers, through a mechanism known as "the switch," automatically sent out bills under Dr. Mendelsohn's name.

In 2014, as a result of the investigation prompted by Ms. Gibb and Ms. Geraci's allegations, the Federal Bureau of Investigation and U.S. Department of Health & Human Services' Office of Inspector General raided Zwanger's Lindenhurst offices.

Zwanger has agreed to settle claims related to: (1) the automatic performance of unnecessary tests, specifically DXA and vertebral-fracture assessment tests and pelvic and transvaginal ultrasounds (performing both when only one was necessary) and (2) billing for services performed by uncredentialed physicians or at unenrolled locations by billing under Dr. Mendelsohn's name or by improperly using the provisions allowing for a temporary fill-in doctor. For reasons unrelated to the veracity of Ms. Gibb and Ms. Geraci's allegations, additional schemes alleged in their complaint and perpetrated by the Zwanger defendants were not pursued by the government.

In total, the U.S. and New York will recover $8,122,898 in civil damages from the allegations of Medicare and Medicaid fraud, and Zwanger will pay an additional $2.4 million in criminal restitution as part of the guilty plea to a criminal charge of healthcare fraud. The civil case was brought under the federal False Claims Act and the New York False Claims Act. Ms. Geraci and Ms. Gibb will receive a portion of the government's civil recovery for reporting the fraud and for the assistance they provided with the subsequent investigation.

"Unfortunately, because of what can only be deemed a technicality, and despite clear evidence of inappropriate 'splitting' behavior — forcing patients to schedule appointments over the course of several days to increase reimbursement — the government was unable to intervene in our clients' claims related to Zwanger's splitting," McCormack said. "Our clients' hope is that CMS sees the damage that this practice can do to patients and closes the door on this abusive behavior. Patients deserve better from their physicians."

"Ms. Geraci and Ms. Gibb are courageous, spirited women who refused to stand by and watch their neighbors and friends be exploited and abused," said Knobler, an associate in Constantine Cannon's Washington, D.C., office. "They believe — as do most of us — that our physicians and healthcare professionals owe us a sacred duty of good faith. The profession and trust we place in them demands it. Dr. Mendelsohn and the Zwanger entities betrayed this trust and broke this duty. Ms. Gibb and Ms. Geraci put relationships and employment opportunity in potential jeopardy to pursue justice for this betrayal."

About Constantine Cannon LLP

Constantine Cannon, with offices in New York, Washington, D.C., San Francisco, and London, has deep expertise in practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities, and e-discovery. The firm's antitrust practice is among the largest and most well recognized in the nation. Constantine Cannon's experience spans across multiple industries including healthcare, banking, electronic payments, insurance, high tech, telecommunications, the Internet and government contracting.

Constantine Cannon's whistleblower practice represents whistleblowers under the False Claims Act, the Dodd-Frank Act, and the various federal and state laws that encourage industry insiders to report evidence of fraud or misconduct. The firm was one of the first in the country to bring a claim under the whistleblower provisions of the Dodd-Frank Act.

To learn more about Constantine Cannon's whistleblower practice, click here. To learn more about the firm generally, click here.

Media Contact:
Andrea M. Garcia
PRCG | Haggerty LLC
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SOURCE Constantine Cannon LLP