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Nov. 22, 2011

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United States Files Suit Against Bestcare Laboratory Services for False Claims Involving Medicare

HOUSTON – The United States has filed suit against BestCare Laboratories Inc. and its founder and principal, Karim A. Maghareh, United States Attorney Kenneth Magidson and Tony West, Assistant Attorney General for the Justice Department’s Civil Division, announced today. The suit alleges the defendants knowingly misrepresented the distances traveled by its lab technicians to artificially increase reimbursement from Medicare for mileage-based technician travel allowance fees. 

According to the complaint filed late yesterday, BestCare transported laboratory test specimens as air cargo from nursing home customers located in the Austin, Dallas/Ft. Worth, El Paso, San Antonio and Waco, Texas, areas to BestCare’s laboratory close to Houston. However, according to the complaint, Bestcare claimed mileage for ground travel as though its technicians personally drove the specimens one-way or round-trip between those cities and its lab in Houston. The complaint also alleges that Maghareh supervised BestCare’s day-to-day operations and directed or authorized the false billing. BestCare is a clinical laboratory founded in 2002, which, according to its website, “has dramatically expanded over the past few years.”

“There’s no question that health care providers are entitled to recover their reasonable costs for services they actually deliver, but we have zero patience for those who invent or inflate Medicare reimbursement claims,” said Assistant Attorney General West. “As today demonstrates, the Justice Department will vigorously enforce the False Claims Act to protect our seniors and safeguard the Medicare trust fund.”

 “Our office is dedicated to recovering tax payer dollars misappropriated from Medicare,” said U.S. Attorney Magidson. “We are committed to aggressively litigating civil suits against dishonest providers to protect the seniors who depend on Medicare.”

The original lawsuit was filed by Richard Drummond under the qui tam, or whistleblower,provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. The private plaintiffs, called “relators,” are entitled to receive a share of any recoveries under the lawsuit. The False Claims Act permits the government to recover three times its damages plus civil penalties allegations.

This action is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $8.5 billion. 

The case is being handled by Assistant United States Attorney Michelle Zingaro of the Southern District of Texas and Dick Nicholson from the Department of Justice - Civil Division.