Kirby McInerney Announces $6.5 Million False Claims Act Settlement against a Medical Practice that Paid Kickbacks for Patient Referrals through False “Rental” Agreements

The law firm of Kirby McInerney LLP is proud to announce that a False Claims Act whistleblower case it brought has resulted in a $6.5 million settlement and the defendant’s exclusion from government-funded healthcare programs.

On behalf of its client, Kirby McInerney filed the False Claims Act qui tam (whistleblower) lawsuit in 2018 against the radiology practice Gramercy Cardiac Diagnostic Services P.C. and its founder, owner, and principal Dr. Klaus Peter Rentrop. The complaint alleged that these defendants violated the federal and New York State False Claims Acts by paying kickbacks, disguised as rental agreements, to pay large numbers of doctors for referring patients to their radiology business.

After Kirby McInerney filed the whistleblower case, the federal and New York State governments investigated and decided to intervene in the case and pursue the claims. They negotiated a settlement with Gramercy Cardiac and Dr. Rentrop based on their ability to pay, rather than on the much larger amount they had falsely billed to the government.

As part of the settlement, Gramercy Cardiac and Dr. Rentrop will pay the government $6.5 million and have admitted to their misconduct. In addition, Dr. Rentrop will be excluded from participating in government-funded healthcare programs such as Medicare and Medicaid.

“Gramercy Cardiac and Dr. Rentrop’s kickback scheme was a way to divert taxpayer dollars into their own pockets without regard to the health of their patients and the integrity of the government programs. We are proud to have stopped them,” said Randall Fox, who handled the case for Kirby McInerney together with David Kovel.

The multi-year kickback scheme was brought to light by Kirby McInerney’s client, a physician to whom Gramercy Cardiac and Dr. Rentrop unsuccessfully marketed their scheme. Under the False Claims Act, whistleblowers can receive as awards a share of the government’s recovery.

Mr. Fox added “This case shows that an effective whistleblower does not need to be an insider. The key is that the person has useful, concrete, provable information that the defendant was engaging in wrongful conduct. Here, the defendants’ kickback scheme could work only if they enlisted doctors to refer patients. Their marketing of the illegal scheme led to its unraveling.”

Kirby McInerney extends its gratitude to its client and the United States Attorney’s Office for the Southern District of New York and the New York State Attorney General’s Medicaid Fraud Control Unit for investigating and pursuing this case. In particular, it thanks Assistant United States Attorney Jacob Lillywhite and Special Assistant Attorney General Hillary Chapman and their teams for leading the case to its successful conclusion.

If you are aware of violations that have victimized the government or investors that might be addressed by a whistleblower program, please contact Kirby McInerney LLP partners Randall Fox by email at rfox@kmllp.com or David Kovel at dkovel@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in whistleblower, securities, antitrust, and consumer litigation. The firm’s efforts to protect the integrity of government and investors’ dollars have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website and its whistleblower website.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

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