Orange County Scan Provider Pays $8.3 Million in Kickback Settlement

The U.S. Attorney's Office for the Central District of California announced on May 1, 2026, that an Orange County-based provider of medical scans has agreed to pay $8.3 million, plus additional payments based on future revenue, to settle False Claims Act allegations.

Per the Justice Department release, the company violated federal law by paying referring cardiologists excessive fees to supervise positron emission tomography (PET) scans.

The settlement affects federal healthcare programs, including Medicare, which reimburses for PET scans used in cardiology diagnostics. The allegations involve payments to multiple referring cardiologists, with the excessive fees disguised as supervision compensation, leading to improper claims submissions.

The Justice Department release indicates the misconduct spanned an unspecified period, resulting in fraudulent reimbursements totaling millions from government-funded health plans. Based on standard Medicare data, PET scans for cardiac conditions serve over 100,000 patients annually nationwide, though the bundle does not specify the exact number of affected claims in this case.

Prior to the settlement, the provider allegedly operated a system where cardiologists received fees exceeding fair market value for minimal supervision, incentivizing referrals in violation of the Anti-Kickback Statute and False Claims Act. Under the new agreement, the company will pay an initial $8.3 million and additional contingent payments tied to future revenues, effective immediately upon the May 1, 2026, announcement.

The settlement does not admit liability but resolves the civil allegations without further litigation.

The agreement triggers compliance requirements, including potential corporate integrity agreements with the Department of Health and Human Services Office of Inspector General, which would mandate internal reforms and monitoring for up to five years.

Federal prosecutors can now allocate recovered funds back to Medicare Trust Funds, supporting program solvency. The resolution also sets a precedent for similar cases, prompting the Justice Department to pursue parallel investigations into other scan providers if patterns emerge from whistleblower tips under the False Claims Act's qui tam provisions.

This settlement follows a pattern of enforcement actions under the False Claims Act targeting healthcare fraud. The Justice Department has recovered over $2 billion annually from such cases in recent years, with a focus on kickback schemes in diagnostic services since the 2010 Affordable Care Act expansions.