News | July 14, 2011

Teleradiologist Convicted of Fraudulent Diagnoses Prepared by Non-Physicians

July 14, 2011 — A jury in federal district court has returned a guilty verdict against Rajashakher P. Reddy, M.D., 41, of Atlanta, Ga., on charges of wire fraud, mail fraud, healthcare fraud and obstruction of justice. Reddy, a radiologist who ran the Atlanta-based radiology practice Reddy Solutions Inc., was charged with and found guilty of perpetrating a scheme to defraud various hospitals by signing and submitting tens of thousands of radiology reports without even reviewing many of the X-rays, mammograms, computed tomography (CT) scans and other films that were the subjects of the reports.

U.S. Attorney Sally Quillian Yates said of today’s verdict, “This physician fraudulently cut corners at the expense of the hospitals he worked for and the patients who were being treated. He produced tens of thousands of reports claiming to include his medical findings and diagnoses based on radiology studies that had been performed, when in fact all those interpretations had been performed by non-qualified medical assistants. We hope this case helps protect the public from such an egregious breach of trust.”

Brian Lamkin, Special Agent in Charge, FBI Atlanta, said, “Medical fraud investigations are difficult, and in this case, the combination of lies and paper trails ultimately led to a doctor who simply was not serving his patients, but serving himself and his company. People who are sick deserve to have their test results seen and professionally analyzed by a doctor, and not by a machine set up to generate profits. FBI and our investigative partners will continue to take on such medical fraud cases, as the safety of our community could be at risk.”

“The healthcare fraud committed by Dr. Reddy is appalling because he risked the health of innocent, trusting patients and betrayed the medical community while stealing federal taxpayer dollars from the Medicare program,” said Derrick L. Jackson, Special Agent in Charge of the Atlanta region for the office of inspector general of the Department of Health & Human Services. “When criminals like Raja Reddy try to cover their crimes by obstructing a federal investigation, they will be prosecuted to the fullest extent of the law.”

The jury found Reddy guilty of 20 counts of wire fraud, five counts of mail fraud, four counts of healthcare fraud and one count of obstruction of justice. He was acquitted of five counts of wire fraud. The jury deliberated for one day after a six-day trial. Reddy was indicted by a federal grand jury on the charges on Nov. 3, 2009.

According to U.S. Attorney Yates, the charges and other information presented in court Reddy’s company, RSI, provided radiologist coverage — interpreting X-rays and other films — to various hospitals in the Southeast that otherwise typically lacked full-time radiology coverage. Generally, hospital staff would take the images, which Reddy and other RSI radiologists would access remotely via computer. The RSI radiologist was supposed to review the image, prepare and sign a report expressing his or her medical conclusions, and electronically transmit back to the hospital. Reddy was both the president of the company as well as one of the principal radiologists supposedly interpreting film and preparing reports.

The evidence at trial showed that from May 2007 through January 2008, Reddy signed and submitted thousands of reports in his name without even reviewing the films that were the subjects of the reports. Rather, he had non-physician technicians known as radiology practice assistants (RPAs) review the film and prepare the reports. In some cases, Reddy directed the RSI staff to simply sign for him and transmit the report as if he had prepared it. In other cases, Reddy accessed the system solely for the purpose of signing and submitting the reports. Either way, the majority of the time he never looked at and analyzed the underlying films, and the reports signed by him therefore did not bear his medical conclusions or those of any other doctor.

The evidence at trial included computer records that showed that while Reddy signed more than 70,000 radiology reports in eight months, he only viewed digital computer images of the studies less than 5,900 times during those months. The employees who actually viewed the majority of these studies were the RPAs, who are not qualified to interpret films but whom Reddy could hire at a fraction of the cost of hiring a radiologist. The proof also included dozens of reports supposedly signed by Reddy at times when he was, in fact, traveling in the air on airplanes that lacked Internet access. These reports were signed by other employees, using Reddy’s electronic password at his direction.

The evidence revealed that Reddy also fraudulently passed off these reports prepared by non-physician assistants thousands of times to several hospitals, mainly involving X-rays, but also including some CT scans, mammograms and ultrasounds. Some of the hospitals and other facilities that may have received these fraudulent reports include Mountain Lakes Medical Center in Clayton, Ga.; Upson Regional Medical Center in Thomaston, Ga.; Bullock County Hospital in Union Springs, Ala.; Crenshaw Community Hospital in Lucerne, Ala.; and Columbus Diagnostic Centers in Columbus, Ga.

In addition to fraud charges stemming from his fraudulent submission of these medical reports, Reddy was also convicted of obstructing the investigation. During the investigation, a government subpoena to RSI demanded production of the computer records that were supposed to keep track of which users accessed what images and when. Reddy instructed employees to destroy those records and, instead, create for purposes of producing to the government new fabricated records, which falsely stated that Reddy had been viewing images instead of the assistants. Witnesses at the trial explained how they were instructed by Reddy to make these fabrications and to then produce the false records to the government in response to the subpoena. The evidence at trial also showed that Reddy disposed of computer equipment requested by the government and asked employees to lie to investigators.

Reddy could receive a maximum sentence of 20 years in prison and a fine of up to $250,000 for each of the 32 fraud and obstruction counts of which he was convicted. Sentencing will occur at a date to be determined before U.S. District Judge Orinda D. Evans. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

This case was investigated by special agents of the Federal Bureau of Investigation and the Department of Health and Human Services.

Assistant U.S. Attorneys Justin S. Anand and Kurt R. Erskine are prosecuting the case.

 

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