Radiology-centers chain is in default, FDA says

By Paul Adams | Sun reporter

July 3, 2008

A regional chain of radiology centers and its owner are in default on $1.1 million in fines for performing mammograms after one of its facilities lost its certification to perform the procedure because of equipment problems, according to documents released this week by the Food and Drug Administration.

The FDA issued a "notice of default" to Dr. Amile A. Korangy, owner of Korangy Radiology Associates, on June 20 after he failed to make a scheduled payment of $579,000 last month. The letter indicates the agency rejected Korangy's offer to pay $150,000 June 12, followed by payments of $100,000 per month until the debt was paid. Korangy's centers operate under the name Baltimore Imaging Centers, which has nine locations, according to its Web site.

"If I have the money, I'll pay it," said Korangy, who says he is still appealing the penalty. "If I don't have the money, I cannot pay it."

The FDA sought civil penalties against Korangy after finding that his Catonsville radiology center had performed 192 mammograms over a roughly two-month period in 2002 after it lost the certification required under federal law. The standards were set up to ensure that patients get high-quality images, which can lead to early diagnosis of breast cancer.

The American College of Radiology, a federally approved accreditation body, determined in early 2002 that mammography equipment at Korangy's Catonsville facility produced poor-quality images and failed to meet standards for certification. The group subsequently informed Korangy of its finding by letter. Korangy said he purchased and began using new equipment. The FDA complaint says he continued to perform mammograms without certification until late July, when the new equipment was approved for use.

Korangy said the agency is making him a scapegoat, and that his centers have operated for 25 years without any problems.

The FDA said yesterday it doesn't comment on pending legal matters.

Korangy appealed the original FDA ruling to an administrative law judge, saying he couldn't afford the steep penalty. He also argued in legal documents that the fine was excessive, and that he never received FDA letters indicating he was in violation of federal law.

The judge rejected those arguments, noting among other things that Korangy had been "less than forthcoming" in providing financial information proving he lacked the ability to pay the fine. The judge noted that Korangy appeared to have transferred ownership of property he owned to family members, into trusts or into the name of another company, Korangy says the moves were made years ago for estate-planning purposes.

Korangy also lost an appeal to the U.S. Court of Appeals for the 4th District last year. Among other things, the court said the FDA's penalty was not excessive. Congress allowed for a fine of up to $10,000 per violation, but the FDA agreed to reduce the penalty to $3,000 per violation in this case.