Houston Radiologist Settles Anti-Kickback Case for $650,000

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Houston radiologist Jack L. Baker settled with the government last week, agreeing to pay$650,000 for paying referring doctors illegal kickback for sending patients to his Fairmont Diagnostic Center and Open MRI Inc. imaging center. He will also be barred from participating in Medicare and Medicaid for six years.

The two of referring physicians who brought Baker’s activity to the attention of the government — Philip Blum, MD, a neurologist, and David Spinks, DO, a family medicine practitioner — will be entitled to 20 percent of the settlement or $130,000 under the False Claims Act’s qui tam (whistleblower) rules.

According to an announcement by U.S. Attorney Kenneth Magidson, between 2002 and 2010, Baker violated the False Claims Act, the Anti-Kickback Statute, the Stark Statute and the Texas Medicaid Fraud Prevention Act by entering into prohibited financial relationships with up to 17 physicians.

These financial relationships included:

  1. Sham personal services contracts (medical directorships) that took into account the value of referrals from the medical directors.
  2. Contracts to pay the salaries of employees in physicians’ offices, which also took into account the value of referrals from those physicians.

The investigation was conducted by the Department of Health and Human Services - Office of Inspector General. Assistant United States Attorney Andrew A. Bobb handled the case.