On February 17, 2016, a federal jury convicted the owner of Alpha Diagnostics, Rafael Chikvashvili of multiple felonies: health care fraud and wire fraud conspiracy, healthcare fraud (including two counts of health care fraud resulting in death); wire fraud, false statements and aggravated identity theft. The total billings to Medicare and Medicaid were more than $7.5 million.
Judge Bredar ordered that Mr. Chikvashvili be immediately taken into custody with a detention hearing to be held to determine whether he will remain in custody pending his sentencing.
According to the evidence presented at the two-and-a-half week trial, Mr.Chikvashvili formed Alpha Diagnostics Services, Inc., which later became Alpha Diagnostics, LLC, in 1993, and was the Managing Member, Authorized Official, Managing Employee, President and Chief Executive Officer for Alpha Diagnostics. Mr. Chikvashvili holds a PhD in mathematics, but was never a medical doctor or licensed physician.
Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist.
Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist.
Alpha Diagnostics was a portable diagnostic services provider, principally of X-rays, but also provided ultrasound tests, and cardiologic examinations. Alpha Diagnostics’ clients included nursing homes whose patients were covered by Medicare and Medicaid. Alpha Diagnostics operated in Maryland, Delaware, Pennsylvania, Virginia and the District of Columbia, but was headquartered in Owings Mills, Maryland, where Mr. Chikvashvili worked full time.
Based on the evidence, the jury found that from 1997 through October 2013, Mr. Chikvashvili conspired with others to defraud Medicare and Medicaid by:
- creating false radiology, ultrasound and cardiologic interpretation reports;
- submitting insurance claims for medical examination interpretations that were never completed by licensed physicians;
- falsely representing to Medicare and Medicaid, as well as to treating physicians, that the interpretations had, in fact, been completed by actual licensed physicians;
- submitting insurance claims for radiology, ultrasound and cardiologic examinations (and their associated costs) that were never performed and/or were not ordered by the treating physician; and
- submitting claims for transportation and other charges that Alpha Diagnostics was not entitled to receive.
- creating false radiology, ultrasound and cardiologic interpretation reports;
- submitting insurance claims for medical examination interpretations that were never completed by licensed physicians;
- falsely representing to Medicare and Medicaid, as well as to treating physicians, that the interpretations had, in fact, been completed by actual licensed physicians;
- submitting insurance claims for radiology, ultrasound and cardiologic examinations (and their associated costs) that were never performed and/or were not ordered by the treating physician; and
- submitting claims for transportation and other charges that Alpha Diagnostics was not entitled to receive.
According to witness testimony, Mr. Chikvashvili instructed his non-physician employees, including Mr. Emeigh, to interpret X-rays, ultrasounds and cardiologic examinations instead of licensed radiologists.
For example, in June 2012, Emeigh traveled to Jamaica for a vacation. The evidence showed that Chikvashvili directed Mr. Emeigh, through text messages and telephone calls, to view medical images using his personal laptop in his hotel room and then draft false physician interpretation reports. Alpha Diagnostics personnel subsequently submitted false claims to Medicare for these images and fraudulent physician reports.
The evidence showed that Mr. Chikvashvili also caused employees to draft licensed physician’s examination reports. Mr. Chikvashvili, in turn, caused a copy of the handwritten signature of the actual physician to be affixed to the report, or forged the physician’s signature himself, creating the appearance that a licensed physician had performed the medical interpretation.
According to the testimony provided at trial, two patients died because their X-rays were not interpreted by a qualified radiologist. Instead, non-physician Alpha Diagnostics employees reviewed the images and failed to detect congestive heart failure. As a result of the incorrect reading of one chest X-ray, the first patient with congestive heart failure was not transferred to an acute care facility for treatment, as is standard medical practice, but remained in a rehabilitative nursing home. The patient died four days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray. Witnesses testified that had the patient been transferred, her symptoms could have been addressed.
The second patient was scheduled to undergo elective surgery and the chest X-ray was a pre-operation test to determine if the patient could safely have surgery. According to the evidence presented at trial, although the patient’s X-ray revealed mild congestive heart failure, the non-physician Alpha Diagnostics employee failed to detect it. A patient in congestive heart failure is at an increased risk of bleeding during and after surgery. As a result of the incorrect reading of the chest X-ray, the patient was cleared for elective surgery and experienced significant bleeding during and after the elective surgery, and the worsening of her congestive heart failure. Six days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray, the patient died.
The second patient was scheduled to undergo elective surgery and the chest X-ray was a pre-operation test to determine if the patient could safely have surgery. According to the evidence presented at trial, although the patient’s X-ray revealed mild congestive heart failure, the non-physician Alpha Diagnostics employee failed to detect it. A patient in congestive heart failure is at an increased risk of bleeding during and after surgery. As a result of the incorrect reading of the chest X-ray, the patient was cleared for elective surgery and experienced significant bleeding during and after the elective surgery, and the worsening of her congestive heart failure. Six days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray, the patient died.
Subsequently, Alpha Diagnostics submitted claims to Medicare falsely representing that licensed radiologists had interpreted both patients’ chest X-rays. Medicare paid Alpha Diagnostics $8.87 for the first claim and $218.36 for the second claim.
Mr. Chikvashvili faces a maximum sentence of life in prison for each of the two counts of healthcare fraud resulting in death; 10 years in prison for each of nine counts of health care fraud; 20 years in prison for each of eight counts of wire fraud and for the conspiracy count; a maximum of five years in prison for each of 11 counts of false statements relating to health care matters; and a mandatory two years, consecutive to any other sentence imposed, for two counts of aggravated identity theft.
Attorney Commentary: IDTFs do not need to be owned by a physician and they often hire "supervising" physicians who do not do much at the IDTF. The reading physicans usually read remotely and thus there is often no physician in place who ensures that all reports have been read by a physician and that any diffcult cases are read again. Excellent technologists often prepare a draft report for the radiologist in order to speed up the process. We have represented radiologists who suspect that the IDTFs are using their names on reports where the studies were not read but could not find a way of proving this had happened.
OIG and State Medi-Cal or Medicaid agencies have been targeting portable IDTFs due to concerns about quality of care and this case shows the worst of what can happen with IDTFs where efforts to save funds on paying radiologists for reading the diagnostic study. IDTFs need to have procedures in place to ensure that all reports have been read and reviewed by a radiologist.
Posted by Tracy Green, Esq.
