The Ohio attorney general has filed a civil complaint against a Cleveland physician for allegedly falsifying information to the state that allowed the physician to sidestep certificate-of-need reviews of his magnetic resonance imaging center.
Another physician, James Zelch, M.D., is under investigation by Attorney General Lee Fisher's office for similar allegations, a spokeswoman for the attorney general said. Dr. Zelch operates Northshore Radiology in Cleveland.
The complaint against Faissal Zahrawi, M.D., of Cleveland Orthopedic Center, was filed April 15 in Franklin County Court of Common Pleas. It seeks $200,000 in civil penalties and a permanent injunction. A hearing is scheduled for May 24.
Meanwhile, the Cleveland Plain Dealer reported that HHS Secretary Donna Shalala has ordered an investigation of claims filed by Ohio physicians who order treatments on expensive medical equipment they own.
Ms. Shalala instructed Medicare officials to monitor magnetic resonance imaging claims to make sure tax dollars aren't going to physicians who invest in MRI equipment and then order the $1,000 scans unnecessarily.
Some of the physicians may have violated federal anti-kickback laws meant to protect patients from unnecessary tests, Ms. Shalala said. Information gathered by Medicare investigators would be given to the U.S. attorney's office in Cleveland, she said.
Last month, the Ohio Legislature approved a bill that included a moratorium on MRI CON approvals until Nov. 30. The moratorium was prompted by a three-part series published by the Plain Dealer that reported alleged physician abuse of the CON review process.
State Sen. Grace Drake (R-Solon), chairwoman of the Senate's Health and Human Services Committee, also plans to introduce a bill this month that would toughen the state's CON law. Among other things, the proposed bill would require CON review of all MRIs and other high-technology diagnostic equipment, increase fines to $1 million from $100,000 and increase compliance monitoring to five years from 18 months.
In the Cleveland Orthopedic case, Dr. Zahrawi was accused of misinforming state officials that his facility would be used as a physician office and that his cost to purchase the MRI was under the $1 million threshold that would trigger a CON review, according to a spokesman for the Ohio Department of Health. That department referred the case to the attorney general.
The attorney general's complaint alleges that Dr. Zahrawi's office is actually a freestanding diagnostic imaging center and his MRI equipment costs exceeded $1 million.
The Health Department also referred Dr. Zelch to the attorney general's office for legal action, a department spokesman said. The Plain Dealer reported that Dr. Zelch operates 14 MRI centers in Ohio, Illinois, Florida and several other states and runs a multimillion radiology business.
The newspaper also reported that Khem Khooblall, M.D., helped Dr. Zelch open an MRI center near Parma (Ohio) Community General Hospital. After the center opened, Parma Community invested money in Dr. Zelch's MRI, a Parma spokeswoman said. Dr. Khooblall owns the building and leases it to Dr. Zelch, the Parma spokeswoman said.
Nearly five years ago, Parma Community trustees determined that Dr. Khooblall was responsible for sending death threats to Parma's former administrator (See accompanying story).
Drs. Zelch and Zahrawi were unavailable for comment on the latest developments.
Since 1991, the state Health Department has forced cash settlements totalling $928,725 in 37 cases of CON abuse, a spokeswoman said. It also is investigating 12 additional cases of suspected CON violations, she said.
"(We have) taken enforcement action against many people who have misled the state in order to obtain CONs," said Peter Somani, M.D., the state director of health. "The time has come for the state to get tougher with the flim-flam artists."