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Healthcare Lab, Owners to Pay Over $13.6 Million to Settle False Claims Act Allegations Surrounding Unordered, Medically Unnecessary Testing

Posted  March 29, 2024

The DOJ recently announced a settlement with Gamma Healthcare, Inc., a company that provided clinical laboratory testing and radiology services, and three of its owners.  Under the settlement, the defendants will pay over $13.6 million to resolve allegations of billing Medicare for lab tests that were not ordered by healthcare providers and were not medically necessary. 

In particular, the DOJ alleged that the defendants “submitted or caused to be submitted claims to Medicare for medically unnecessary polymerase chain reaction (PCR) urinalysis laboratory tests that were not ordered by treating physicians.”  As spelled out in the settlement papers, the DOJ contended that when a physician ordered a urine test from Gamma, Gamma automatically performed and submitted Medicare claims for PCR testing, which is a more expensive type of testing.  The DOJ further contended that Gamma’s form to request lab services was structured in such a way that physicians who ordered one type of (less expensive) test could not opt out of the (more expensive) PCR testing.   

Like so many other successful False Claims Act settlements, the claims leading to this settlement were initially brought by a whistleblower.  In this case, the whistleblower was a doctor who served patients for whom Gamma had provided lab services.  Under the terms of the settlement agreement and as publicly disclosed, the whistleblower will receive 17% ($2,315,342.23) of the settlement proceeds. 

If you would like more information on what it means to be a whistleblower or think you may have information relating to healthcare or pharmaceutical fraud, laboratory or testing fraud, fraud involving kickbacks, or any other kind of fraud or misconduct involving a government program, please feel free to contact us so we can connect you with a member of the Constantine Cannon whistleblower lawyer team for a free and confidential consultation.