Inform Diagnostics Agrees to Pay $16 Million to Resolve False Claims Act Allegations of Medically Unnecessary Tests
BOSTON – Inform Diagnostics, Inc., (Inform) formerly known as Miraca Life Sciences, Inc. (Inform), has agreed to pay $16 million to resolve allegations that it submitted false claims for payment to Medicare and other federal health care programs.
Inform is a clinical laboratory headquartered in Irving, Texas, that provides anatomic pathology services to physician practices throughout the United States. On April 27, 2022, Fulgent Genetics purchased Inform, and the company is now a wholly owned subsidiary of Fulgent Genetics.
According to the settlement, Inform admits that, between 2013 and 2018, it routinely and automatically conducted additional tests on biopsy specimens prior to a pathologist’s review and without an individualized determination regarding whether additional tests were medically necessary. The United States contends that Inform’s policy of conducting routine additional tests caused Inform to perform many tests that were medically unnecessary. Inform submitted these medically unnecessary tests for payment, causing federal health care programs to pay for false claims.
“Laboratories that bill for medically unnecessary tests drain funds from Medicare and other federally funded health care programs,” said United States Attorney Rachael S. Rollins. “Prioritizing profit over complying with the law wastes hard earned taxpayer dollars. Companies that engage in this fraudulent conduct will be held accountable.”
“Clinical laboratories are expected to closely follow Medicare rules and bill properly — nothing more, nothing less,” said Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of Inspector General. “When that obligation is violated, government health care programs – and American taxpayers – pay the price. We are committed to pursuing these types of allegations along with our law enforcement partners as we work to protect the integrity of our federal health care system.”
“Companies that provide services to VA will be held to the highest standards of integrity, professionalism, and accountability,” said Christopher Algieri, Special Agent in Charge of the Veteran Affairs’ Office of Inspector General’s Northeast Field Office. “Submitting claims for medically unnecessary services will not be tolerated, and the VA OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to hold wrongdoers accountable.”
“Submitting claims for medically unnecessary tests threatens the integrity of the federal health care programs and wastes taxpayer dollars,” said Amy K. Parker, Special Agent in Charge of the Office of Personnel Management’s Office of Inspector General. “Today’s settlement is a reminder to all providers that the OPM OIG will not tolerate fraud against the Federal Employees Health Benefits Program.”
“Billing federal health care programs for medically unnecessary tests contributes to the soaring costs of health care for all of us,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s settlement with Inform Diagnostics demonstrates the FBI’s commitment to ensuring that health care providers base their treatment decisions on patients’ needs rather than their own financial interests.”
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the government and share in any recovery. In connection with today’s settlement, the whistleblower will receive 17 percent of the recovery.
U.S. Attorney Rollins, HHS-OIG SAC Coyne, FBI SAC Bonavolonta and OPM OIG SAC Parker made the announcement today. The Department of Veterans Affairs’ Office of the Inspector General also provided assistance. Assistant U.S. Attorneys Alexandra Brazier and Lindsey Ross of Rollins’s Affirmative Civil Enforcement Unit handled the matter.