Wisconsin-based Pharmasan Labs, Inc., its related billing companyNeuroScience, Inc. and their founders, Gottfried and Mieke Kellermann, agreed to pay $8.5 million to resolve charges they violated the False Claims Act by (i) submitting false information for laboratory services, and (ii) violating Medicare rules for services referred by non-physician practitioners. According to the government, and as admitted by Pharmasan under the settlement, Pharmasan falsely billed Medicare for ineligible food sensitivity testing; knew Medicare prohibited payment for such testing; and submitted false information to Medicare to disguise the type of test it was performing so Medicare would cover it. Pharmasan also admitted violating Medicare billing rules which bar payment for lab services referred by non-physicians. The government investigation leading to the settlement originated from a whistleblower action filed under the qui tam provisions of the False Claims Act. The whistleblower will receive a whistleblower award of roughly $1.1 million from the government’s recovery. Whistleblower Insider
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