Zwanger-Pesiri Radiology agrees in plea deal to pay $8M

Zwanger-Pesiri Radiology, a company that provides diagnostic testing and imaging services throughout Long Island, on Wednesday agreed to pay more than $8 million to settle a lawsuit accusing the Lindenhurst-based business of submitting false claims to Medicare and Medicaid programs for more than six years.

The family-owned enterprise, headed by Dr. Steven Mendelsohn, also pleaded guilty before a federal judge in Central Islip to two counts of fraud for illegally performing and billing the public health insurance plans, as well as private ones, for procedures that doctors had not ordered.

Zwanger-Pesiri, which operates 21 medical offices in Nassau and Suffolk counties, agreed to forfeit $2.4 million in the criminal case.

“Zwanger-Pesiri illegally pursued corporate profits at the expense of federal and state health care providers and taxpayers,” Robert L. Capers, the U.S. attorney for the Eastern District, said in a news release. “Today’s guilty plea and approximate $10.5 million global settlement demonstrates our vigilance in bringing to justice those who put profits first and health care second.”

U.S. District Court Judge Joanna Seybert approved the settlement and the plea agreement.

The settlement and the plea came more than two years after federal agents raided Zwanger-Pesiri’s headquarters and seized its business records.

The joint investigation began after two whistleblowers, former employees of Zwanger-Pesiri, alerted authorities of the company’s illegal billing practices.

When a doctor ordered a test for his or her patient, federal prosecutors said Zwanger-Pesiri’s employees automatically perform a related test that had not been ordered by the doctor.

For example, from January 2008 to February 2014, when female patients were referred to Zwanger-Pesiri for a pelvic or transvaginal ultrasound, its employees performed and billed for both tests.

From July 2009 and February 2014, when patients were referred to Zwanger-Pesiri for a dual energy X-ray absorptiometry bone scan or a vertebral fracture assessment, both procedures were done even though only one was requested.

Of the $8.1 million settlement from the lawsuit, $6.9 million goes to the federal government and $1.2 million to New York State. Some of the money, about $1.4 million, go to the two whistleblowers.

Mendelsohn who was named in the lawsuit but who was not charged, said in a statement his company did not admit any wrongdoing. Federal and state officials, however, will monitor Zwanger-Pesiri’s billing practices for five years.

More than 5,000 physicians referred patients to Zwanger-Pesiri in 2015 and the company served 800,000 patients, according to Mendelsohn.

“We are pleased to put these investigations behind us, which is in the best interests of our company and our patients,” he said.