Dr. David G. Bostwick, owner of Virginia-based pathology lab Bostwick Laboratories Inc., agreed to pay up to $3.75 million to resolve charges of violating the False Claims Act for billing Medicare and Medicaid for medically unnecessary cancer detection tests and offering incentives to physicians to obtain Medicare and Medicaid business. Specifically, Dr. Bostwick allegedly directed Bostwick Laboratories to bill Medicare and Medicaid for expensive cancer detection tests known as Fluorescent In Situ Hybridization (FISH) tests, as well as other tests, that were not medically necessary and were performed without the treating physicians’ consent or order. FISH tests are used to detect bladder cancer. Bostwick also allegedly offered various discounts and billing arrangements to treating physicians to induce them to refer business in violation of the Anti-Kickback Statute. On Aug. 28, 2014, Bostwick Laboratories previously agreed to pay over $6.5 million to resolve the allegations in this lawsuit. The allegations were originally raised in a whistleblower lawsuit brought by Michael Daugherty, who works in the industry, under the qui tam provisions of the False Claims Act. Daugherty will receive a whistleblower award of over $2.5 million from the government’s settlements. DOJ
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