January 22, 2007—Eleven MRI companies operating 19 imaging centers—including MIDI LLC, Golf Diagnostic Imaging, Northwest Corporate Imaging and Rand Imaging—are the target of an Illinois lawsuit claiming that their arcane equipment “lease” arrangements are an elaborate cover-up for kickback payments to referring physicians.

The case was originally filed last February, but was complicated on Jan. 17 by intervention from the Illinois state attorney general. Benjamin Weinberg, chief of the attorney general’s public interest division, said the state will seek an injunction to stop the alleged kickback schemes. The state will also pursue restitution and damages related to the insurance payments for the scans.

With the high cost of advanced medical imaging burdening the Medicare system, any practice that might drive up the cost of scans is under sharp scrutiny. Federal authorities in Florida are investigating a similar arrangement, and Louisiana lawmakers have warned doctors that analogous leasing arrangements are considered illegal there.

—Cat Vasko