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Laboratory and IDTF

This archive displays posts tagged as relevant to laboratories and independent diagnostic testing facilities. You may also be interested in our pages:

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January 6, 2020

Exceltox, a genetic testing laboratory in California, has agreed to pay $357,584 to resolve allegations of submitting false claims to Medicare over two months in 2015.  With the help of a New Jersey-based contractor named Seth Rehfuss, Exceltox allegedly performed genetic tests on seniors in New Jersey-based senior housing complexes without proper orders from a treating physician, then submitted claims to Medicare for these tests.  For his role in the fraud, Rehfuss was sentenced to over 4 years in prison in 2019.  USAO NJ

October 2, 2020

Pharmatech, Inc. and its CEO and founder Tuan Pham will pay over $3 million to settle allegations in a case initiated as a qui tam action under the False Claims Act.  The government alleged that defendants violated the Anti-Kickback Statute by paying a medical clinic, Imperial Valley Wellness, a per-specimen fee to induce it to refer orders for laboratory drug-testing to Phamatech which were subsequently billed to Medicare.  Many of the tests were also alleged to be not medically necessary. The whistleblower, former Pharmatech employee John Polanco, will receive over $500,000 from the settlement.  USAO SD Cal.

September 22, 2020

New Jersey biotechnology company Bio-Reference Laboratories, Inc., will pay $11.5 million to resolve two actions brought by whistleblowers alleging that defendant violated the Anti-Kickback statute by paying unlawful remuneration to physicians based on the volume of those doctors’ referrals to defendant.  The remuneration took the form of payments for a percentage of the cost of electronic medical records software used by the doctors.  In addition, defendant was alleged to have unlawfully billed Medicare and Tricare for testing performed on hospital inpatients, instead of billing the hospitals themselves.  USAO SDNY

July 23, 2020

Progenity, Inc., f/k/a Ascendant MDx, Inc., has agreed to pay a total of $49 million to resolve allegations that the California-based clinical laboratory submitted false claims to Medicaid, the VA, TRICARE, and the Federal Employees Health Benefits Program (FEHBP) through different fraudulent schemes.  First, from 2012 to 2016, Progenity allegedly billed the programs for non-reimbursable prenatal tests using a reimbursable billing code.  Second, in claims originally brought by a whistleblower under the False Claims Act, the company was alleged to violate the Anti-Kickback Statue by providing improper incentives to physicians—including paying above fair market value for blood specimen “draw fees”, providing tens of thousands of dollars in free food and alcohol, and routinely reducing or waiving co-insurance or deductibles—in order to induce physicians to order their tests.  Approximately $35.9 million of the settlement proceeds will go toward resolving federal claims, with the remaining $13.1 million paid to different states.  AG NC; USAO SDCA; USAO SDNY

July 20, 2020

Drug testing laboratory Sterling Healthcare Opco, LLC, doing business as Cordant Health Solutions will pay $12 million to resolve allegations in a False Claims Act case brought by a whistleblower that it paid unlawful kickbacks to Northwest Physicians Laboratories, LLC and Genesis Marketing Group in exchange for referrals of urine drug tests paid for by federal healthcare programs and performed at Cordant labs in Tacoma (Regional Toxicology Services LLC d/b/a Sterling Reference Laboratory) and Denver (Rocky Mountain Tox LLC d/b/a Forensic Laboratories).  The whistleblower will receive 20% of the settlement, or approximately $2.4 millionUSAO WD WA

July 1, 2020

Genetic testing company Agendia, Inc., which offers the MammaPrint test analyzing genes within breast cancer tumors to predict recurrence, will pay $8.25 million to resolve claims of Medicare fraud in a case brought by a whistleblower under the False Claims Act.  Agendia was alleged to have conspired with hospitals to delay the performance of MammaPrint tests for patients discharged from those hospitals.  Under the Medicare 14-Day Rule in effect during the relevant time period, Agendia was allowed to bill Medicare directly for the test if it was performed more than 14 days after the patient was discharged from the hospital; if the test was performed within 14 days of discharge, then it would be billed through the hospital.  If Agendia received a physician’s order for a Medicare patient within 14 days of the patient’s discharge, it would either cancel the order and require the physician to resubmit it, or otherwise improperly delay the test and claim it was ordered and performed on a later date.  The whistleblower was a former employee of a Kentucky hospital, Mercy Health- Lourdes, which worked with Agendia to allow it to separately bill Medicare for the test, including by holding tissue specimens for 14 days or longer after patients were discharged. The hospital previously paid $211,039 to settle its liability.  No reward amount for the whistleblower was made public.  USAO WDKY  

DOJ Charges Healthcare CEO with Criminal Securities and Healthcare Fraud

Posted  06/12/20
Hands in handcuffs behind back of white man in business suit
In 2008, Rahm Emanuel, then-President Obama’s chief of staff, famously said, “You never want a serious crisis to go to waste.  I mean, it’s an opportunity to do things that you think you could not do before.”  However poorly phrased, generations of political and business leaders have understood the kernel of truth in his admonition. So have scammers and rip-off artists. We have been following the...

May 7, 2020

Seattle Pain Center, Northwest Analytics, and owner/physician Dr. Frank Danger Li have agreed to pay $2.85 million to settle allegations of defrauding Washington’s Medicaid program.  An investigation revealed that between 2013 and 2015, Li had instituted a policy required nearly every patient treated at Seattle Pain Center to be administered the full urine drug panel at each visit even if they were not medically necessary.  The drug tests were then sent to Li’s exclusively-owned laboratory to be analyzed.  Additionally, the investigation revealed that between 2007 and 2016, Li wrote an excessive amount of prescriptions for opioids, and at least 60 of his patients died due to opioid-related causes during this period.  AG WA; USAO WDWA

May 1, 2020

Milwaukee-based Center for Pain Management, S.C. and its owner, Nosheen Hasan, will pay at least $1.35 million to resolve claims that they received unlawful kickbacks in exchange for ordering medically unnecessary tests from a urine drug testing laboratory, Midwest Laboratory Sales & Consulting, LLC, in violation of the False Claims Act.  The investigation was initiated by a whistleblower, who will receive a share of the settlement.  USAO ED WI
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