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HomeNewsLearning the Heart Way: Cardiac PET Scan Provider & Founder Pay $85 Million, Resolving Kickback Allegations

Learning the Heart Way: Cardiac PET Scan Provider & Founder Pay $85 Million, Resolving Kickback Allegations

OCTOBER 12, 2023. The United States Department of Justice announced that Cardiac Imaging Inc. (CII) and its founder, Sam Kancherlapalli, have entered into an almost $85 million settlement agreement to resolve claims that they violated the False Claims Act, the Anti-Kickback Statute, and Stark Law. CII will pay $75 million and Kancherlapalli will pay $10,480,000 for allegedly paying referring cardiologists excessive fees to supervise PET scans. CII, based in Illinois, is a mobile PET scan provider with Kancherlapalli, a Florida resident, heading the organization as CEO.

The U.S. alleged that between March 2014 and May 2023, CII and Kancherlapalli knowingly submitted false claims to federal healthcare programs, in violation of the Anti-Kickback Statue and the Stark Law. These laws prohibit physicians from referring patients for certain health services – paid for by Medicare – to anyone with whom they have a financial relationship. When a healthcare provider is more interested in the benefit of a kickback at an affiliated facility than a patient’s health outcomes, they may recommend and order services that a patient does not actually need or would harm the patient to maximize their affiliate’s reimbursement from government healthcare programs. With Kancherlapalli overseeing operations, CII allegedly paid kickbacks to referring cardiologists, which were provided in the form of above-fair market value fees of $500 or more per hour, given to the cardiologists who supervised PET scans for the patients they referred to CII. The U.S. alleged these fees egregiously exceeded fair market value for cardiology services because CII paid the referring cardiologists for each hour CII spent scanning the patients, including time that the cardiologists were away from CII’s mobile scanning units, or even when they were not on site. These fees also compensated the cardiologists for services that were never provided.

Regarding the case, the U.S. Attorney for the Southern District of Texas emphasized the danger of kickbacks, stating, “Paying illegal kickbacks to cardiologists so they refer patients undermines the integrity of federal healthcare programs and needlessly increases costs…Patients deserve care based on their medical need and not on a doctor or company’s financial interest or gain.”

In accordance with the settlement agreement, CII and Kancherlapalli entered into a five-year corporate integrity agreement, designed to ensure compliance with the Anti-Kickback Statute and Stark Law when working with referring physicians. Furthermore, CII will implement an annual risk assessment and internal review process to identify and address risks associated with physician arrangements and will also retain an Independent Review Organization to perform a transactions review of arrangements.

This settlement resolves claims brought by relator Lynda Pinto, a former billing manager at CII, who courageously blew the whistle and brought light to these allegations. The share of the settlement has yet to be determined, but in a qui tam False Claims Act settlement, the relator is entitled to 15-25% of the government’s recovery.

If you would like to report healthcare fraud including violations of the Anti-Kickback Statute and Stark Law, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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