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February 28, 2024

The owner and operator of a clinical laboratory in Georgia has pleaded guilty and agreed to pay $14.3 million to resolve charges of paying illegal kickbacks and causing false claims to be submitted to Georgia’s Medicaid program.  According to Capstone Diagnostics’ former laboratory manager, Andrew Maloney directed Capstone to pay volume-based commissions to independent sales representatives in exchange for them arranging medically unnecessary urine drug tests and respiratory pathogen panels to come their way.  The laboratory ultimately submitted over $1 million in tainted claims to Georgia Medicaid.  For bringing a successful case under the False Claims Act, whistleblower Jesse Allen will receive almost $3 million.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Laboratory and IDTF, Medicaid, Whistleblower Case, Whistleblower Rewards,

January 10, 2024

Clinical laboratory RDx Bioscience Inc. and its owner and CEO Eric Leykin have agreed to pay over $10 million to the federal government and about $3 million to the State of New Jersey for violating the Anti-Kickback Statute and federal and state False Claims Acts.  From 2018 to 2022, RDx and Leykin were allegedly involved with five types of kickback schemes in order to induce referrals to RDx for laboratory testing, then submitted or caused false claims to be submitted to Medicare and Medicaid that were unnecessary or uncovered.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, FCA State, Healthcare Fraud, Laboratory and IDTF, Lack of Medical Necessity, Medicaid, Medicare,

January 4, 2024

ChristianaCare has paid $42.5 million for violations of the federal False Claims Act and the Delaware False Claims and Reporting Act. In a qui tam whistleblower complaint filed in 2017, ChristianaCare's former chief compliance officer alleged illegal remuneration was provided to non-employee neonatologists and surgeons in the form of free or below fair market services by ancillary support providers, such as nurse practitioners, hospitalists, and physician assistants. These services were meant to induce referrals from the non-employees, creating a financial relationship. USAO DE

Tagged in: Anti-Kickback and Stark, FCA Federal, FCA State, Healthcare Fraud, Provider Fraud, Whistleblower Case,

December 22, 2023

Christiana Care Health System has agreed to pay over $7.6 million to the State of Delaware for violating the federal and state False Claims Acts, and Delaware’s Patient Brokering and Anti-Kickback laws.  According to a qui tam whistleblower, who filed a case in 2017, the healthcare system provided free or below-market rate support services to doctors in exchange for referrals of Medicaid patients, then submitted false claims stemming from those referrals to Delaware’s Medicaid program.  DE AG

Tagged in: Anti-Kickback and Stark, FCA Federal, FCA State, Healthcare Fraud, Medicaid, Provider Fraud, Whistleblower Case,

December 21, 2023

Ultragenyx Pharmaceutical, Inc., maker of Crysvita, will pay $6 million for violating the False Claims Act. Crysvita is prescribed to treat a rare inherited blood disorder, which may require a genetic test to definitively diagnose. To induce purchases and referrals, Ultragenyx paid a laboratory to conduct genetic tests at no cost to healthcare providers or patients, and then provide the results reports to Ultragenyx. Ultragenyx then used the positive test results reports to target healthcare providers for Crysvita sales. Internally, Ultragenyx referred to this kickback scheme as their "sponsored" testing program. The program was exposed via a qui tam whistleblower, who will receive $1.07 million of the $6.7 million recovery. DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Laboratory and IDTF, Medicaid, Medicare, Pharma Fraud, Whistleblower Case,

December 19, 2023

Indiana-based Community Health Network Inc. has agreed to pay $345 million to resolve claims by its former CFO and COO Thomas Fischer, which alleged the healthcare system submitted claims to Medicare that were tainted by violations of the Stark Law.  In order to capture physicians’ downstream referrals, Community paid physicians salaries that were sometimes double market rate, and awarded them bonuses based on the number of referrals.  Community then submitted claims resulting from these referrals for reimbursement.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medicare, Provider Fraud, Whistleblower Case,

October 18, 2023

The president of a California-based medical technology company has been sentenced to 8 years in prison and ordered to pay $24 million in restitution in the first COVID-related criminal securities fraud case charged by DOJ and the first COVID-related criminal healthcare fraud case brought to trial.  Among many things, Mark Schena of Arrayit Corporation was found to have taken advantage of the pandemic by claiming he and his company had developed a technology to test for just about any disease, including COVID, using a single drop of blood.  In doing so, Schena and Arrayit lied to investors to give them a false sense of credibility, paid illegal kickbacks to marketers to run deceptive plans about the accuracy of its tests, and submitted false claims to Medicare and private insurers for medically unnecessary allergy testing.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Financial and Investment Fraud, Healthcare Fraud, Laboratory and IDTF, Lack of Medical Necessity, Medicare,

October 10, 2023

Mobile cardiac PET scan provider Cardiac Imaging Inc. (CII), and its founder and owner Sam Kancherlapalli, have agreed to pay over $75 million and over $10 million, respectively, to resolve a qui tam case by former billing manager Lynda Pinto, which alleged the company, Kancherlapalli, and part-owner Richard Nassenstein defrauded Medicare.  In violation of the Anti-Kickback Statute, Stark Law, and False Claims Act, CII and Kancherlapalli allegedly paid kickbacks to referring cardiologists in the form of fees, ostensibly for supervising PET scans, that were far above fair market value.  The alleged misconduct occurred over a ten year period.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Provider Fraud, Whistleblower Case,

October 2, 2023

BioTek reMEDys Inc. and its CEO, Chaitanya Gadde, have agreed to pay $20 million to resolve allegations of providing illegal kickbacks to patients and physicians, in violation of the False Claims Act and Anti-Kickback Statute.  Former employees Shantae Wyatt and Latoya Sparrow alleged in a qui tam suit that the specialty pharmacy induced patients to purchase drugs by routinely waiving mandatory copays, and induced physicians to make referrals by providing dinners, gifts, and free administrative or clinical support services.  One physician in particular who received kickbacks, Dr. David Tabby, has paid $480,000 to resolve allegations against him.  Wyatt and Sparrow will receive over $4 million from the settlement with BioTek and Gadde, and over $91,000 from the settlement with Tabby.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Whistleblower Case, Whistleblower Rewards,

October 2, 2023

Genomic Health, Inc. (GHI), a wholly-owned subsidiary of Exact Sciences Corporation that provides clinical diagnostic tests, has agreed to pay $32.5 million to resolve two separate qui tam suits alleging violations of the False Claims Act and Anti-Kickback Statute in connection with lab tests for cancer patients.  GHI allegedly evaded Medicare’s 14-Day Rule—which prohibits labs from separately billing for the same covered tests within 14 days of a patient’s discharge from a hospital—by canceling and reordering tests so they fell within appropriate time frames, seeking reimbursement directly from Medicare, and writing off unpaid lab fees owed by hospitals.  As a result of this settlement, the whistleblowers in the case will receive over $5.5 million.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Laboratory and IDTF, Medicare, Whistleblower Case, Whistleblower Rewards,

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