Agendia, Inc., Knoxville Comprehensive Breast Center, PLLC, And Knoxville Dermatopathology Laboratory, LLC Agree To Settle False Claims Act Allegations For More Than $3,750,000

KNOXVILLE, Tenn. – Agendia, Inc., a global molecular diagnostics company that offers genomic testing designed to profile certain types of breast cancer, including a lab test called MammaPrint, agreed to settle allegations under the False Claims Act (FCA) that the company submitted deceptive claims for reimbursement for MammaPrint genomic tests to government health care benefit programs.  Under the terms of the settlement, Agendia will pay at least $3,250,000 and potentially additional sums if the privately held Company is sold.  In separate settlements, Knoxville Comprehensive Breast Center (KCBC) and Knoxville Dermatopathology Laboratory (KDL) agreed to resolve related FCA allegations for $322,500 and $207,500, respectively.

According to filed documents, it was alleged that from August 1, 2019, through September 30, 2022, Agendia knowingly submitted false claims for MammaPrint testing to Medicare, Medicaid, and other government payors.  The United States contended that the MammaPrint claims were false because Agendia caused physicians and providers (referring providers) to order MammaPrint testing that was not reasonable or medically necessary through standing or automatic orders.  The government also maintained that certain claims submitted by Agendia were deceptive because they were tainted by the payment of illegal remuneration to referring providers who ordered the tests - including extravagant dinners, excessive or improper honoraria, gift cards, and payments per referral or monthly flat rate payment arrangements.  The settlements also resolve allegations that KCBC and KDL, working together, knowingly participated in Agendia’s scheme to obtain referrals for MammaPrint that were not reasonable and necessary and/or were induced by illegal compensation provided by Agendia.

“The Medicare and Medicaid programs deliver coverage for vital medical and diagnostic testing to beneficiaries and recipients,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee.  “False claims submitted to these programs for costly genomic testing that was not reasonable and medically necessary and inducing referrals through improper payments made to referring providers are not victimless offenses.  The settlement in this case demonstrates that the United States Attorney’s Office and federal, state, and local law enforcement partners, are using all tools available to redress fraud and abuse and preserve scarce financial resources for legitimate and necessary medical care.”

"Violations of the Anti-Kickback Statute related to laboratory testing waste valuable federal health care program funds and undermine the integrity of medical decision-making," said Special Agent in Charge Kelly J. Blackmon of the Department of Health and Human Services Office of Inspector General (HHS-OIG).  "Participants in federal health care programs must comply with laws designed to protect program funds and ensure patients receive appropriate, high-quality care."

“Wrongful billing for unnecessary medical testing undermines the integrity of the Federal Employees Health Benefits Program, generating costs for the government but no benefit to patients,” said Special Agent in Charge Derek M. Holt of the U.S. Office of Personnel Management Office of the Inspector General.  “We applaud the tireless work of our investigative staff and partners at the Department of Justice, holding accountable those who seek to enrich themselves at the expense of the taxpayers.”

The civil settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the False Claims Act by two relators, Dr. Raymond Brig and Mr. Lance Albertson, in two separate cases.  Under the whistleblower provisions, a private party can file an action on behalf of the United States and may receive a portion of any recovery.  The two qui tam cases are captioned U.S. ex rel. Raymond Brig, M.D. v. Agendia, Inc. et al., Case No. 3:21-CV-286 (E.D. Tenn.) and U.S. ex rel. Lance Albertson v. Agendia, Inc., Case No. 3:23-CV-289 (E.D. Tenn.).  The relators will receive $296,725 of the proceeds from the settlement and may eventually receive as much as $921,725.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for Eastern District of Tennessee, with assistance from OPM-OIG, HHS-OIG, and the Tennessee Valley Authority’s Office of the Inspector General (TVA-OIG).

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care 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 800-HHS-TIPS (800-447-8477).

The matter was handled by Assistant U.S. Attorneys Alan G. McGonigal and Alexa Ortiz Hadley for the Eastern District of Tennessee.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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