Modern Nuclear Inc. (MNI), a La Habra, California-based provider of mobile cardiac positron emission tomography (PET) scans operating since 1988, has agreed to pay $8,334,350.71, plus additional amounts tied to future revenues, to resolve Department of Justice allegations that it paid unlawful kickbacks to referring cardiologists in violation of the Anti-Kickback Statute and the False Claims Act. The scheme, as alleged by the United States, ran from September 1, 2016 through January 14, 2025, a period of nearly nine years during which MNI submitted false or fraudulent claims to federal healthcare programs including Medicare. The core allegation is straightforward: MNI paid cardiologists fees well above fair market value, framed as supervision compensation for PET scans those same cardiologists had referred to MNI. In practice, those fees were paid even when the cardiologists were not on site, or were in their own offices seeing other patients, or were being compensated for additional services they never actually provided. The settlement is structured as an ability-to-pay arrangement, meaning the DOJ determined that MNI cannot pay the full value of the alleged harm and accepted a reduced figure accordingly.
Mobile PET Scan Providers Have Been a Sustained DOJ Enforcement Target for the Same Scheme
The MNI settlement follows a pattern the DOJ has pursued across the mobile cardiac imaging industry for more than a decade. The mechanics of the alleged kickback arrangement are identical to those that produced an $85M settlement from Cardiac Imaging Inc. (CII) and its CEO Sam Kancherlapalli in 2023, in which CII was accused of paying referring cardiologists $500 or more per hour to supervise PET scans for patients they had referred, including time when cardiologists were absent from the mobile units. The Anti-Kickback Statute exists specifically to prevent financial arrangements between imaging providers and referring physicians from distorting clinical decision-making. When a cardiologist receives above-market compensation tied to the volume of patients sent to a particular provider, the statute treats that as an illegal inducement regardless of how the payment is labeled.
MNI’s alleged conduct fits within this framework precisely. The referring cardiologists were paid ostensibly for supervision of the scans. The United States alleged those fees substantially exceeded fair market value, and that the payments covered time the cardiologists were not present and services they did not provide. Each claim submitted to Medicare arising from this arrangement was, under the False Claims Act, a false or fraudulent claim against the federal government.
MNI Has Operated in Southern California Since 1988, Serving Cardiac Patients Across 5 Counties
Modern Nuclear Inc. describes itself as a pioneer in mobile nuclear medicine diagnostic imaging, with services spanning Los Angeles, Orange, Riverside, San Bernardino, and San Diego counties. The company brings mobile PET/CT and SPECT equipment directly to cardiology practices, allowing referring physicians to offer advanced cardiac imaging without permanent on-site infrastructure. Its NPI registry listing identifies the authorized official as Patrick Laverty II CNMT, listed as CEO, and places the company at 511 South Harbor Boulevard, La Habra.
The mobile model is central to understanding how the alleged kickback scheme functioned. When a mobile imaging company brings equipment to a cardiologist’s office and pays that cardiologist to supervise scans, the cardiologist is simultaneously the referral source and the paid supervisor. The DOJ’s position in cases like this is that above-market supervision fees in this context are not compensation for legitimate services but financial inducements designed to ensure a steady stream of patient referrals. The DOJ settlement announcement confirmed that MNI’s payments covered time cardiologists were in their own offices seeing other patients or were not on site at all, facts that undercut any legitimate supervision rationale.
The Settlement Includes Future Revenue Payments and Reflects MNI’s Limited Ability to Pay
The $8,334,350.71 figure is not the full measure of the alleged harm. The settlement is explicitly framed as based on MNI’s ability to pay, a DOJ standard applied when a defendant company lacks the financial resources to satisfy full disgorgement and penalties. In addition to the fixed payment, MNI agreed to pay additional amounts calculated from future revenues, a structure that extends the government’s recovery over time as the company generates income. This kind of structured settlement is common in False Claims Act cases involving smaller operators where a lump-sum demand would force insolvency, leaving the government with less than a negotiated resolution.
The violation period of nearly nine years, from September 2016 through January 2025, is significant. It spans multiple Medicare billing cycles, annual compliance certifications, and any internal audits or legal reviews MNI would have conducted during that time. The length of the alleged conduct is a factor courts and the DOJ weigh when assessing culpability and whether the settlement amount is proportionate.
Conclusion
The MNI case is the latest in a sustained federal enforcement campaign targeting mobile PET scan providers that have used above-market supervision fees to build and maintain cardiologist referral pipelines at Medicare’s expense. The scheme is not novel, and the DOJ has made clear through repeated enforcement actions that the mobile imaging sector receives no special treatment under the Anti-Kickback Statute. MNI’s settlement of $8.33M plus a future revenue share reflects both the scale of the alleged conduct over nearly nine years and the company’s financial limitations. For patients whose cardiologists received these payments, the settlement raises a question the DOJ has posed consistently in these cases: whether their referrals were driven by clinical judgment or by the size of the check arriving from the imaging provider.
