The Justice Department announced the settlement on Monday, which resolves allegations that Memphis’s Poplar Healthcare and its subsidiary GI Pathology promoted and billed the government for medically unnecessary diagnostic tests.
Poplar allegedly marketed certain stain tests as capable of definitely diagnosing a condition called mast cell enterocolitis. But according to DOJ, “Poplar’s promotion of the test was not consistent with FDA approval requirements, and not supported by adequate scientific evidence.”
The government initiated its investigation after a pathologist and former Poplar employee filed a lawsuit under the qui tam provisions of the False Claims Act. The whistleblower, Dr. Gordon Wang, will receive over $200,000 from the settlement proceeds.
In a press release, Acting U.S. Attorney Stephen G. Damruch said “[f]ederal funding for diagnostic tests and procedures is predicated on the principle that those tests are ordered because they are medically necessary and in the best interest of patients, and not on other, inappropriate factors. We will continue to take aggressive action to address situations where profit, rather than the best interests of patients, drives the decision to conduct and bill for medical tests.”
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