Tri-City Cardiology, Phoenix Doctors to Pay $4.75M Settlement Over Allegedly Unnecessary Procedures

Four cardiologists from Arizona’s Phoenix Metropolitan area have agreed to pay $4.75 million to settle allegations of performing unnecessary medical procedures and submitting fraudulent claims to federal healthcare programs, the Justice Department announced Tuesday.

The settlement resolves a lengthy investigation into physicians from Tri-City Cardiology, a prominent cardiology practice serving the East Valley area of Phoenix. The physicians allegedly performed medically unnecessary peripheral vascular procedures and ordered unnecessary diagnostic tests between 2009 and 2011, according to federal authorities.

“Medical providers who perform procedures they know are not needed put patients at risk and increase health care costs for all of us,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in a statement. “The department will continue to pursue those who knowingly perform unnecessary procedures and bill federal health care programs for them.”

The allegations first came to light through a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. This federal law allows private individuals with knowledge of fraud against government programs to file lawsuits on behalf of the United States and receive a portion of any recovery.

Federal investigators determined that the cardiologists allegedly performed peripheral arterial interventions that were not medically indicated and falsified patient records to justify these procedures. Additionally, they allegedly ordered unnecessary ultrasound tests for patients, further increasing billings to Medicare, Medicaid, and other federal healthcare programs.

The settlement highlights ongoing concerns about healthcare fraud and unnecessary medical procedures in specialty medicine, particularly in cardiology, where procedures can be highly remunerative. Unnecessary cardiac procedures not only waste healthcare resources but expose patients to serious risks, including complications from invasive treatments, radiation exposure, and potential long-term health consequences.

According to healthcare fraud experts, cardiology has been a focus of federal investigators in recent years due to the high cost of cardiovascular procedures and the potential for abuse. A single unnecessary peripheral vascular intervention can cost tens of thousands of dollars, creating substantial financial incentives for improper practices.

“Performing medically unnecessary procedures is not only a waste of taxpayer dollars but puts patients at needless risk,” said U.S. Attorney Gary Restaino for the District of Arizona. “This settlement demonstrates our commitment to protecting both patients and the integrity of federal healthcare programs.”

The settlement does not include an admission of liability by the physicians or Tri-City Cardiology, which is common in such agreements. However, as part of the settlement, the physicians have agreed to enhanced compliance measures and monitoring requirements to prevent similar issues in the future.

The whistleblower who brought the original case will receive approximately $855,000 of the settlement amount as a reward for coming forward with information about the alleged fraud. The whistleblower’s identity has not been publicly disclosed.

This case is part of a broader effort by federal authorities to combat healthcare fraud nationwide. In fiscal year 2022, the Justice Department recovered over $2.2 billion from False Claims Act cases, with a significant portion coming from healthcare fraud settlements.

The Tri-City Cardiology case was investigated by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Arizona, with assistance from the Department of Health and Human Services Office of Inspector General.

Healthcare compliance experts note that this settlement serves as a reminder to medical practices about the importance of robust internal compliance programs and proper documentation of medical necessity for all procedures. The case also demonstrates the effectiveness of whistleblower provisions in uncovering potential healthcare fraud that might otherwise go undetected.

For patients in the Phoenix area who may have received care at Tri-City Cardiology during the period in question, healthcare advocates recommend consulting with another provider about the necessity of any past procedures or ongoing treatment plans.