South Carolina Lab Pleads Guilty and Will Pay At Least $6.8M to Resolve Kickback Allegations Involving Doctors
By the Constantine Cannon Whistleblower Team
Clinical laboratory LTD Holding LLC (previously Labtech Diagnostics LLC) based in Anderson, South Carolina, and its founder and CEO Joseph Labash, agreed to pay roughly $6.8 million to settle False Claims Act allegations that they paid illegal kickbacks to doctors from August 2018 to November 2021. This settlement brings the DOJ’s total civil False Claims Act recoveries related to Labtech to more than $11.5 million, including settlements with nine doctors.[1]
Labtech and Labash’s Alleged Scheme
Along with the civil settlement, Labtech pleaded guilty to five counts of offering and paying healthcare kickbacks in violation of the Anti-Kickback Statute, Title 42, U.S. Code, Sections 1320a-7b(b)(2)(A) and (B). As part of the plea agreement, Labtech will pay $103,551.90 in restitution, in addition to the civil recoveries.[2]
What is the Anti-Kickback Statute?
The Anti-Kickback Statute and Stark Law prohibit medical providers from paying or receiving kickbacks or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs such as Medicare and Medicaid. These laws also restrict certain financial relationships that create improper incentives in medical decision-making.
How Can Whistleblowers Report Violations of the Anti-Kickback and Stark Law?
Whistleblowers are essential in uncovering violations of the Anti-Kickback Statute and Stark laws, ensuring the integrity of the system, safeguarding patients, and saving taxpayer money.
Illegal kickbacks and other financial schemes can occur at various levels within the healthcare system, from individual medical practices to the executive suites of global pharmaceutical companies and beyond.
The Whistleblower in This Case
The settlement resolves allegations raised in a lawsuit initially filed by whistleblower (or relator) Mahmod Altwam under the False Claims Act. Under the qui tam or whistleblower provisions of the False Claims Act, private individuals can sue on the government’s behalf if they believe false claims for government funds have been submitted, and they can receive a portion of any recovery. Altwam will receive $1.36 million from the settlement proceeds. The qui tam case is titled United States ex rel. Altwam v. Labtech Diagnostics LLC, et al., No. 8:21-cv-2844 (D.S.C.).[3]
Comments on this Case
Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) commented: “When medical decisions are bought and sold, patients suffer and public trust erodes. Kickback schemes like this violate the core of federal healthcare programs, and HHS-OIG will continue to relentlessly pursue anyone who exploits these programs and hold them fully accountable for their actions.”[4]
According to Constantine Cannon partner Marlene Koury: “This action reflects the government’s continued focus on enforcing the Anti-Kickback and Stark laws where financial incentives compromise patient care and program integrity.”
Constantine Cannon Has Significant Experience Representing False Claims Act Whistleblowers
Our firm has significant experience representing whistleblowers under the False Claims Act. If you would like to learn more about the firm’s whistleblower successes, what it means to be a whistleblower, or if you believe you have a case, please contact us. We will connect you with an experienced member of our whistleblower team for a free and confidential consultation.
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Sources:
[1] See https://www.justice.gov/opa/pr/south-carolina-laboratory-pleads-guilty-and-agrees-pay-least-68m-settle-allegations
[2] Id.
[3] Id.
[4] Id.
Tagged in: Anti-Kickback and Stark, False Claims Act,