NJ Doctors Arrested in Alleged Kickback Scheme

15 doctors and health care providers have been charged with receiving bribes for referring patients to a diagnostic facility

By Samantha Henry
|  Tuesday, Dec 13, 2011  |  Updated 4:48 PM EDT
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NJ Doctors Arrested in Alleged Kickback Scheme

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Federal authorities charged more than a dozen doctors Tuesday in an alleged kickback scheme, accusing them of receiving cash payments for referring patients to a northern New Jersey diagnostic facility for tests.

U.S. Attorney Paul Fishman says 15 doctors and other health care providers have been charged with receiving bribes in exchange for referring mostly Medicaid and Medicare patients to the Orange Community MRI radiology and diagnostic facility in Orange.

An attorney for the facility said he was unaware of the charges.

It wasn't yet clear how much money had been paid in the kickback scheme, which began as early as 2010, Fishman said. Investigators estimate the payments ranged from $200 to more than $5,000 per month per defendant, and they tracked at least 32 separate payments made to or by the 15 defendants for a total of $51,500 in just a two-month period between early October and December 2011.

"Selling test referrals for cash is illegal," Fishman said. "Patients have every right to expect their doctors will recommend medical service providers because they do the best job, not because they provide the best bribes."

Fishman said the investigation was ongoing, and it wasn't clear if any of the referrals had been for unnecessary procedures.

Prosecutors said an undercover cooperating witness posing as an OCM employee tallied the amount of bribes based on "kickback reports."

The reports were used to tally how many Medicaid, Medicare or privately insured patients' doctors had referred to OCM for diagnostic tests such as MRI's, ultrasounds or CT scans, Fishman said.

Fourteen health care practitioners with offices in Newark, Orange, East Orange, West Orange or Irvington were arrested Tuesday morning. Each is charged with one count of violating federal health care anti-kickback statutes. The charge carries a potential sentence of five years in prison and fines.

OCM's executive director, Chirag Patel of Warren, was arrested Dec. 8 and released on $750,000 bail, according to the U.S. attorney's office. A message left Tuesday for his attorney was not immediately returned.

It was not immediately clear who was representing the remaining defendants, who were due to appear in Newark federal court Tuesday afternoon.

According to court records, OCM started the alleged kickback scheme as early as 2010. Prosecutors said the facility would calculate the "kickback reports" at the end of each month and determine how much each defendant was owed.

One defendant, Franklin Lakes practitioner Dov Rand, allegedly bragged to the undercover witness that his recent appearance on an episode of "The Real Housewives of New Jersey" would bolster his profile and lead to more referrals, according to court papers.

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