Medical lab company with Valley locations accused of false claims
PHOENIX — The U.S. Department of Justice filed a complaint under the False Claims Act against lab company Modern Vascular, which has multiple Arizona locations.
Modern Vascular — which has locations in Mesa, Glendale, Tucson and Sun City — is accused of implementing a fraud scheme to receive over $50 million in false claims from Medicare from Jan. 1, 2017, through at least June 30, 2022.
The complaint alleges the defendants offered up to 20 physicians the chance to invest in the company and required physician-investors to make referrals to Modern Vascular office-based labs.
This introduced Medicare and TRICARE patients to Modern Vascular for the treatment of peripheral arterial disease, which is caused by plaque buildup that reduces the flow of blood in vessels that carry it away from the heart.
The corporation allegedly hired radiologists and vascular surgeons and pressured staff to perform a target number of weekly and monthly invasive procedures on referred patients.
“Kickbacks and other illegal financial incentives, like those paid and received by defendants in this case, have long been prohibited because of their potential to corrupt the clinical judgment of medical professionals,” the complaint said.
The complaint was filed in three consolidated lawsuits pending in the United States District Court for the District of Arizona and is being handled by the Commercial Litigation Branch of the DOJ’s Civil Division and the U.S. Attorney’s Office in Arizona.
“Improper financial arrangements between health care providers and referring physicians can lead to overutilization and increase the cost of health care services paid by taxpayers,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a press release.