Thursday, July 15, 2010

Beverly Hills Radiology Clinic Pays $647,000 to Resolve Qui Tam Lawsuit Alleging It Billed Medicare for Unneeded Tests

On July 2, 2010, Beverly Hills radiology clinic The Oaks Diagnostics, Inc., dba Advanced Radiology, agreed to pay the federal government $647,000 to settle allegations that it filed false claims with Medicare for unnecessary radiological tests. These allegations and the civil lawsuit had been initiated in 2003 and took approximately seven years to resolve.

The payment prompted the government to ask a federal judge this morning to dismiss a civil lawsuit that alleged Advanced Radiology performed unnecessary diagnostic tests and billed Medicare for the procedures.The United States alleged in the civil lawsuit that Advanced Radiology and its owner, Dr. Ronald Grusd, engaged in a scheme to bill Medicare for unnecessary tests performed at Advanced Radiology from 1999 through 2002.

As part of the alleged scheme, an Advanced Radiology contractor recruited Medicare beneficiaries to undergo diagnostic tests such as CT scans and MRIs, even though the beneficiaries did not need the tests. That contractor—Nordelyn Lowder—pleaded guilty to one count of health care fraud in connection with the scheme. Lowder was sentenced in June 2008 to 20 months in federal prison and was ordered to pay $426,455 in restitution.

The settlement resolves allegations initially made against Advanced Radiology in a “whistleblower” lawsuit filed pursuant to the qui tam provisions of the False Claims Act, which allow a private party to file a civil action on behalf of the United States and receive a portion of the recovery. The whistleblower lawsuit was originally filed in 2003 by a former Advanced Radiology employee. The United States intervened and took over prosecution of the case in February 2008.

Advanced Radiology paid the settlement without admitting any wrongdoing. Dr. Grusd is not a party to the settlement, but in light of the settlement with Advanced Radiology the government has opted to dismiss the lawsuit against him. This case was investigated by the Office of Inspector General of the Department of Health and Human Services and the Federal Bureau of Investigation.

Posted by Tracy Green, Esq. Please email Ms. Green at or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.

Any questions or comments  should be directed to Tracy Green, a very experienced California health care fraud attorney, radiology fraud attorney, California Medicare fraud attorney, and California Medi-Cal fraud attorney at

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country. Their website is:


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