Clinical laboratory Genesis Reference Laboratories LLC (Genesis), of Orlando, Florida, has agreed to pay $1,195,845 to resolve False Claims Act allegations that its marketers paid illegal kickbacks to healthcare providers in violation of the Anti-Kickback Statute to induce laboratory testing referrals. Genesis has agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged scheme.
“The payment of kickbacks by laboratories or their representatives to induce laboratory test referrals undermines the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue those who offer or receive kickbacks for patient referrals regardless of how those unlawful inducements are characterized or provided.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlement announced today resolves allegations that from 2019 to 2021 Genesis paid marketing companies Corum Group LLC, Provisional Medical Consultants LLC and RMC Medical LLC to arrange for and recommend that healthcare providers in Missouri and Texas order Genesis’ laboratory tests, and the marketing companies kicked back a portion of those payments to referring healthcare providers, in violation of the Anti-Kickback Statute. The health care providers allegedly were paid using purported management services organizations (MSOs), which attempted to disguise the kickbacks as investment returns but actually offered the payments to health care providers to induce laboratory testing referrals to Genesis. The settlement resolves allegations that, despite knowing of the MSO kickbacks to health care providers and receiving those providers’ subsequent patient referrals, Genesis nevertheless submitted to Medicare the claims for laboratory testing ordered by those providers, in violation of the False Claims Act.
“Kickbacks have no place in our healthcare system,” said U.S. Attorney Philip Sellinger for the District of New Jersey. “Health care providers and clinical laboratories are on notice that benefits in exchange for referrals are improper and may violate the Anti-Kickback Statute. Our office is committed to holding responsible individuals and entities who commit and profit from health care fraud. We have pursued and will continue to pursue the laboratories who enter into unlawful financial arrangements that waste taxpayer dollars and improperly influence healthcare providers’ medical judgments by promising unjust financial enrichment.”
“Violations of the Anti-Kickback Statute can induce medically unnecessary testing and influence physicians’ decision-making inappropriately,” said Special Agent in Charge Naomi Gruchacz for the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG. The settlement announced today was handled by Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorney Kruti Dharia for the District of New Jersey. The United States has recovered over $36 million relating to conduct involving MSO kickbacks to health care providers, including False Claims Act settlements with 41 physicians, two laboratories, four medical practices, three healthcare executives and one office manager.
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.