SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement'') is entered into among the United States of
America, acting through the United States Depruiment of Justice and on behalf of the Office of
Inspector General ("OIG-HHS") of the Department of Health and Human Services ("HHS")
(collectively, the "United States"); the State of California, acting through the California Attomey
General's Bureau of Medi-Cal Fraud and Elder Abuse ("California"); and Cardiovascular
Consultants Heart Center, A Medical Corporation, formerly known as Cardiovascular
Consultants of Fresno, P.C., acting through its President, Dr. Kevin Boran ("CVC Heart Center")
and its shareholders, Dr. Kevin Boran, Dr. Michael Gen, Dr. Rohit Sundrani, Dr. Donald
Gregory, and Dr. William Hanks (collectively ''Defendants"); (hereafter collectively referred to
as ''the Parties").
RECITALS

A.

CVC Heart Center is a cardiology medical practice, incorporated in California,

with cardiology clinics at 1207 E. Herndon Avenue, Fresno, California, 93720, and at 729 North
Medical Center Drive West, Suite 123, Clovis, CA 93611. Drs. Kevin Boran, Michael Gen,
Rohit Sundrani, Donald Gregory, and William Hanks, are interventional cardiologists who, at all
relevant times, were shareholders of CVC Heart Center.
B.

The United States and California contend that the Defendants submitted or caused

to be submitted claims for payment to the Medicill'e Program, Title XVIII of the Social Security
Act, 42 U.S.C. §§ 1395~1395kkk-l (''Medicare' 1), and the Medicaid Program, 42 U.S.C, §§
1396~1396w-5 ("Medicaid"), known in California as "Medi-Cal".
C.

The United States and California contend that they have ce1iain civil claims

against the Defendants arising from claims submitted by CVC Heaii Center to Medicare Part B
and/or Medicaid and paid between January 1,2010 and December 31, 2015 for cardiovascular

2094744.2

 nuclear scans using CPT 78451, 78452, and 78472 (not ancillary procedures) for which there had
been another nuclear scan within the prior fourteen months ("repeat nuclear scans") in patients
with no Evaluation -and Management (physician consults) billed in the prior thirty days, and who
did not have a diagnosis of diabetes or coronary artery disease ("CAD") at the time of the repeat
nuclear scan. That conduct is referred to below as the "Covered Conduct."
D.

This Agreement is neither an admission of liability by the Defendants nor a

concession by the United States or California that their claims are not well founded. Defendants
deny the allegations in Paragraph C.
To avoid the delay, uncertainty, inconvenie.r.ce, and expense of litigation of the Covered
Conduct, and in consideration of the mutual promises and obligations of this Settlement
Agreement, the Parties agree and covenant as follows:
TERMS AND CONDITIONS
1.

CVC Heart Center shall pay a total of one million, two hundred thousand dollars

($1,200,000.00) ("Settlement Amount") to the United States and Califomia as follows. CVC
Beart Center agrees to pay the United States one million., one hundred eighty-six thousand, four
hundred and sixteen dollars ($1,186,416.00) (the "Federal Settlement Amount"). CVC Heart
Center further agrees to pay Ca:Iifomia thirteen thousand, five hundred and eighty-four dollars
($13,584.00) (the "State Settlement Amount"). The foregoing payments shall be made as
follows:
a.

CVC Heart Center agre€s to pay the full Federal Settlement Amount to the United
States in two installments. The first installment bf one-half of the Federal Settlement
Amount shall be made no later than forty-five (45) business days after the Effective
Date of this Agreement. The second installment of the remaining Federal Settlement
Amount shall be made no later than sixty (60) business days after the Effective Date.

2094744.2

2

 Both payments shall be made by electronic funds transfer, pursuant to written
instructions to be provided by the Office of the United States Attorney for the Eastern
District of California. If payments are not timely received, CVC Heart Center shall
also pay the United States interest on the Federal Settlement Amount at a rate of
10. 0% per annum from the Effeoti ve Date of the Agreement through the date payment
is finally received.
b.

eve Heait Center agrees to pay the full State Settlement Amount to California no
later than sixty (60) business days after the Effective Date of this Agreement by
electronic funds transfer, pursuant to written instructions to be provided by the State
of California. If payment is not tip-iely received,

eve Heart Center shall also pay the

State of Califomia interest on the State Settlement Amount at a rate of 10.0% per
annum from the Effective Date of the Agreement through the date payment is finally
received.

2.

Subject to the exceptions in Paragraph 4 (concerning excluded claims) below, and

conditioned upon CVC Heait Center's full payment of the Settlement Amount, the United States
releases Defendants, together with CVC Heart Center's current and former parent corporations,
predecessors, successors, heirs, transferees, affiliates, direct and indirect subsidiaries, brother or
sister corporations, divisions, partners, licensees, and joint ventures; and the corporate successors
and assigns of any of them, from any civil or administrative monetary claim the United States
has for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Civil
Monetary Penalties Law, 42 U.S.C. § 1320a-7a; the Program Fraud Civil Remedies Act, 31
U.S.C. §§ 3801-3812; or the coqunon law theories of payment by mistake, unjust enrichment,
and fraud.

2094744.2

3

 3.

Subject to the exceptions in Paragraph 4 (concerning excluded claims) below, and

conditioned upon CVC Heart Center's full payment of the Settlement Amount, the State of
California releases Defendants, together with CVC Heart Center's current and former parent
corporations, predecessors, successors, heirs, transferees, affiliates, direct and indirect
subsidiaries, brother or sister corporations, divisions, partners, licensees, and joint ventures;
current or former cotporate owners; and the corporc.te successors and assigns of any of them,
from any civil or administrative monetary claim the State of California has for the Covered
Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the California False Claims Act;
Cal. Gov 't Code § 1265 0 et seq.; or the common law theories of payment by mistake, unjust
enrichment, and fraud.
4.

Notwithstanding the release given in Paragraphs 2 and 3 of this Agreement, or

any other term of this Agreement, the following claims of the United States and/or California are
specifically reserved and are not released:
a.

Any liability arising under Title 26, U.S. Code (Internal Revenue Code);

b.

Any criminal liability;

c.

Except as explicitly stated in :his Agreement, any administrative liability,
including mandatory and permissive exclusion from Federal or State
health care programs;

d.

Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct;

e.

Any liability to California (or its agencies) for any conduct other than the
Covered Conduct;

2094744.2

e.

Any liability based upon obligations created by this Agreement;

f.

Any liability of individuals not specifically named as Defendants herein;

4

 g.

Any liability for express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services;

h.

Any liability for failure to deliver goods or services due;

i.

Any liability for personal injury or property damage or for other
consequential damages arising from the Covered Conduct.

5.

Defendants waive and shall not assert any defenses they may have to any criminal

prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution,
this Agreement bars a remedy sought in such criminal prosecution or administrative action.
Nothing in this paragraph or any other provision of this Agreement constitutes an agreement by
the United States concerning the characterization of the Settlement Amount for purposes of the
Internal Revenue laws, Title 26 of the United States Code.
6.

Defendants, together with their present and fo1mer affiliates, parents, subsidiaries,

divisions and subdivisions, fully and finally re.lease the United States, its agenoies, officers,
agents, employees, and servants, from any claims (b.cluding attorney's fees, costs, and expenses
of eve.ry kind and however denominated) that Defendants have asserted, could have asserted, or
may assert in the future against the United States, its agencies, officers, agents, employees, and
servants related to the Covered Conduct and the United States' investigation and prosecution
thereof. Defendants hereby expressly waive all rights they may have by virtue of Section 1542
of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE
2094144.2

5

 RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
Defendants' releases herein shall be effective whether or not they release claims that are
currently known, unknown, foreseen or unforese!';ln.
7.

Defendants, together with their present and former affiliates, parents, subsidiaries,

divisions and subdivisions, fully and finally release the State of California, its agencies, officers,
agents, employees, and servants, from any claims (including attorney's fees, costs, and expenses
of every kind and however denominated) that Defendants have asserted, could have asserted, or
may assert in the future against California, its agencies, officers, agents, employees, and servants
related to the Covered Conduct and the United States' investigation and prosecution thereof.
Defendants hereby expressly waive all rights they may have by virtue of Section 1542 of the
California Civil Code, set forth above. Defendants' releases herein shall be effective whether or
not they release claims that are currently known, unknown, foreseen or unforeseen.
8,

The Settlement Amount shall not be decreased as a result of the denial of claims

for payment now being withheld from payment by any Medicare contractor (e.g., Medicare
Administrative Contractor~ fiscal intermediary, carrier) or any state payer, including, but not
limited to, Medi-Cal, related to the Covered Conduct; and Defendants agree not to resubmit to
any Medicare contractor or any state payer, including but not limited to, Medi-Cal, any
previously denied claims related to the Covered Conduct, agrees not to appeal any such denials
of claims, and agrees to withdraw any such pending appeals.
9.

Defendants agree to the following:
a.

Unallowable Costs Defined: All costs (as defined in the Federal

Acquisition Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of the Social
Security Act, 42 U.S.C. §§ 1395-1395kkk-1 and 1396-1396w-5; and the regulations and official

2094744.2.

6

 program directives promulgated thereunder) incurred by or on behalf of Defendants, their present
or former officers, directors, employees, shareholders, and agents in connection with:
(1)

the matters covered by this Agreement;

(2)

the United States' audit(s) and civil investigation(s) of the matters covered
by this Agreement;

(3)

Defendants' investigation, defense, and corrective actions undertaken in
response to the United States' audit(s) and civil investigation(s) in.
connection with the matters covered by this Agreement (including
attorney's fees);

(4)

the negotiation and performance of this Agreement; and

(5)

the payment Defendants mab to the United States pursuant to this
Agreement,

are unallowable costs for government contracting purposes and under the Medicare Program,
Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program
(FEHBP) (hereinafter referred to as Unallowable Costs).
b.

Future Treatment ofUnallow-able Costs: Unallowable Costs shall be

separately detennined and accounted for by Defendants, and Defendants shall not charge such
Unallowable Costs dire.ctly or indirectly to any contracts with the United States or any State
Medicaid program, or seek payment for such Unallowable Costs through any cost report, cost
statement, information statement, or payment request submitted by CVC Heart Center or any of
its subsidiaries or affiliates to the Medicare, Medicaid, TRICARE, or FEHBP Programs.
c.

Treatment ofUnallowable Ccsts Previously Submitted for Payment:

Defendants further agree that within 90 days of the Effective Date of this Agreement they shall
identify to applicable Medicare fiscal intermediades, carriers, and/or contractors, and Medicaid

2094744.2

7

 fisc~l agents, any Unallowable Cost~ (as defined in this Paragraph) included in payments
previously sought from the United States, or any State Medicaid program, including, but not
limited to, payments sought in any cost reports, cost statements, infonnation reports, or payment
requests already submitted by Defondants or any of its subsidiaries or affiliates, and shall
request, and agree, that such cost reports, cost statements, information reports, or payment
requests, even if already settled, be adjusted to acccunt for the effect of the inclusion of the
1.mallowable costs. Defendants agree that the United States, at a minimum, shall be entitled to
recoup from Defendants any overpayment plus applicable interest and penalties as a result of the
inclusion of such Unallowable Costs on previously-submitted cost reports, information reports,
cost statements, or requests for payment.
Any payments due after the adjustments have been made shall be paid to the United
States pursuant to the direction of the Department of Justice and/or the affected agencies; The
United States reserves its rights to disagree with any calculations submitted by Defendants or any
of its subsidiades or affiliates on the effect of inclusion ofUnallowable Costs (as defined in this
Paragraph) on Defendants or any of its subsidiaries :)r affiliates' cost reports, cost statements, or
information reports.
d.

Nothing in this Agreement shall constitute a waiver of the rights of the

United States to audit, examine, or re-examine Defendants' books and records to determine that
no Una1Iowable Costs have been claimed in accordance with the provisions of this Paragraph.
10.

Defendants agree to cooperate fully and truthfully with the United States'

investigation of individuals and entities not released in this Agreement. Upon reasonable notice,
Defendants shall encourage, and agree not to impair, the cooperation of its directors, officers.
and employees, and shall use its best efforts to make available, and encourage, the cooperation of
fonner directors, officers, and employees for interviews and testimony, consistent with the rights

2094744.2

8

 and pl"ivileges of such individuals. Defendants further agree to furnish to the United States, upon
request, complete and unredacted copies of all non-privileged documents, reports, memoranda of
interviews, and records in its possession, custody, or control concerning any investigation of the
Covered Conduct that it has undertaken, or that has been performed by another on its behalf.
11.

This Agreement is intended to be for the benefit of the Parties only. The Parties

do not release any claims against any other person or entity, except to the extent provided for in
Paragraph 12 (waiver for beneficiaries paragraph), below.
12.

Defendants agree that they waive and shall not seek payment for any of the health

care billings covered by this Agreement from any health care beneficiaries or their parents,
sponsors, legally responsible individuals, or third party payers based upon the claims defined as
Covered Conduct.
13.

In the event Defendants fail to pay the Federal and State Settlement Amounts (i.e.,

default), Defendants shall consent to a Consent Judgment against them in the amount of the
unpaid balance of the Federal and State Settlement Amounts, and the United States and
California, as their sole option, may: (a) offset the remaining unpaid balance from any amounts
due and owing to Defendants by any department, agency, or agent of the United States or
California at the time of Default; (b) deduct the remaining unpaid balance at any time from
future financial participation, grant awards, and participation in the Title IV program; (c) collect
the entire unpaid baJance of the Federal and State Settlement Amounts, plus interest (as defined
in Paragraph l) and all other amounts due upon the event of default as specified in this
paragraph; (d) file a civil action for the Covered Conduct; or (e.) exercise any other rights granted
by law or equity, including referral of this matter for private collection.

In the event a complaint is filed pursuant to option (d) in the preceding paragraph because
of CVC Heart Center's non~payment, Defendants agree not to plead, argue, or otherwise raise

2094744.2

9

 any defenses under the theories of statutes of limitations, laches, estoppel, or similar theories,
except to the extent such defenses were available to Defendants on the Effective Date of this
Agreement. If the United States or State of California elect to pursue administrative actions for

the Covered Conduct pursuant to options (a) or (b) in the preceding paragraph, Defendants agree
not to contest any disallowance; offset, or any collection action undertaken by the United States
or California, either administratively or in any state or federal court, except to the extent that the
amounts sought exceed the unpaid balance of the Settlement Amount, plus interest. Defendants
shall pay the United States and California all reasonable costs of collection or enforcement under
this paragraph, including attorneys' fees and expenses.
14.

Except as otherwise set forth herein, each Party shall bear its own legal and other

costs incurred in connection with this matter, incluc.ing the preparation and. performance of this
Agreement.
15.

Each party and signatory to this Agreement represents that it is represented by

counsel of their choosing and freely and voluntarily enters in to this Agreement without any
degree of duress or compulsion.
16.

This Agreement is governed by the laws of the United States. The exclusive

jurisdiction and venue for any dispute relating to this Agreement is the United States District
Court for the Eastern District of California. For purposes of construing this Agreement, this
Agreement shall be deemed to have .been drafted by all Parties to this Agreement and shall not,
therefore, be construed agrunst any Party for that reason in any subsequent dispute.
17.

This Agreement constitutes the complete agreement between the Parties. This

Agreement may not be amended except by written consent of the Parties.
18.

The undersigned counsel represent and warrant that they are fully authorized to

execute this Agreement on behalf of the persons and entities indicated below.

2094744.2

10

 19.

This Agreement may be execUt¢d in counterparts. each of which constitutes an

original and all of which constitute one and the same Agreement.
20.

This Agreement is binding on Defendants and their successors, transferees, heirs,

and assigns.
21.

All parties consent to the United States' and California's disclosure of this

Agreement, and information about this Agreement, to the public.
22.

This Agreement is effective 011 the date of signature of the last signatory to the

Agreement (Effective Date of this Agreement). Facsimiles and electronic transmissions of
signatures shall constitute acceptable, binding signatures for purposes of this Agreement.
THE UNITED STATES OF AMERICA

DATED:~

BY:

~-

Edward A. Baker
Assistant Uhited States Attorney
Eastern District of California
DATED;

Jo/,!:,J t-::+'

BY;

~~q_f.{

2e_

JSaM.Re
Assistant Inspector Genet!aJ for Legal Affairs
Office of Cou:1sel to the Inspector General
Office of Inspector General
United States Department of Health and Human Services

THE STATE OF CALIFORNIA

DATED: _ _ __

BY:

Nicholas Pall!
Supervising Depllty Attorney Ge1icral
California Department of Justice
Bureau ofMedl~Cal Fraud and Elder Abuse

2°094744.2

1]

 19.

This Agreement may be execut~d in counterparts.; each of which constitutes an

original and a11 of which constitute one and the same Agreement.
20.

This Agreement is binding on Defendants and their successors. transferees. heirs,

and assigns.
21.

All parties consent to the United States' and California's disclosure of this

Agreement, and information about this Agreement, to the public.
22.

This Agreement is effective on the· date of signature of the last signatory to the

Agreement (Effective Date afthls Agreement). Facsimiles and electronic transmissions of
signatures shall constitute acceptable, binding signatures for purposes of this Agreement.
'IBE UNITED STATES OF AMERICA

DATED:#

BY:

DATED; _ _ __

BY:-

~-

Edward A. Baker
- ·
Assistant United States Attorney
Eastem District of California

tisaM.Re
Assistant Inspector General for Legal Affairs
Office of Cou:isel to the Inspector General
Office of Inspector General
United States D!'lpartment of f:tealth and Human Services

DATED:~')-

2'094744.2

BY:

Nie 18$ a
Supervisjng Deputy Attorney General
California Department of Justice
Bureau of Medi-Cal Fraud and Elder Abuse

1l

 DEFENDANTS

By:

Kevin oran, M.D , President
As the ei hoN ea representative of
Cardfovascular Consultants Heart Center
1207 El Herndon Avenue
Presn91 CA 93720-3235

n-

!

DATED

°f (2'1/=t-

/

By:

,- > ~(~)

~/i1Kt1-,--

Danic1 0. Jamison, Esq.

As counsel/or CVC Hear Center
Dowling Aaron Inc.
8080 North Palm
Fresno, CA 93711

/

By:~-Patric Hooper, Esq.

Mark Reagan, Esq.
As counsel for CVC Heart Center and the
individual defendant physicians
Hobper, Lundy & Bookman, P.C.
1875 Century Park Ea~t, Suite 1600
Los Angeles, CA 90067-2517

DATED:

Op·~ '(AlOJ/7
•

Ry:

,r

/iL':c{)al,l ~
·

Michael Gen,M.D~V

Cardiovascular Consultants Heart Center
1207 E. Herndon Avenue
Fresno, CA 93720-3235

By:

~
~
Robit Sundrani, M.D,
Cardiovasc1..1Iar Consultants Heart Center
1207 E. Herndon Avenue
Fresno, CA 93720-3235

2094744,2

12

/

 DATED:

DfP.7/B:»17

By:

By:

~

I\ m Hanlcs, M.D.
Car ·~vascular Consultants Heart Center
120 B. Herndon Avenue
Fresno, CA 93720-3235

2094744.2

13