Diagnostic Laboratory Agrees to Pay More Than $1 Million to Settle Alleged False Claims Act Violations

Baltimore, Maryland – Genetic Technological Innovations, LLC (GTI), a diagnostic laboratory headquartered in Scottsdale, Arizona, agreed to pay the United States $1.635 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Statute (AKS).

Kelly O. Hayes, U.S. Attorney for the District of Maryland, announced the settlement with Special Agent in Charge Maureen Dixon, Department of Health and Human Services Office of Inspector General (HHS-OIG).

The government alleges that GTI knowingly submitted claims to Medicare for respiratory pathogen panels (RPPs) that were either medically unnecessary or obtained through kickbacks.

Specifically, the U.S. alleges that on June 5, 2020, GTI entered into a Marketing Services Agreement (MSA) with a purported infection prevention company (The Company).  Under the terms of the MSA, the marketing company agreed to provide “marketing-and-management services” on behalf of GTI within long-term care facilities. In exchange, under the terms of the MSA, GTI agreed to pay the marketing company $4,000 to $4,500 per month for each long-term care facility it “serviced.” According to the U.S., in reality, the MSA served as a pretext for paying the company for laboratory test referrals that GTI then billed to Medicare.  The U.S. alleges that GTI’s payments to The Company for referrals violated the Anti-kickback statute.   

Additionally, the U.S. alleges that GTI paid the company to perform services in long-term care facilities, including specimen collection for infectious disease testing. The Company swabbed residents for COVID-19, but then GTI used the same specimens to conduct and bill Medicare for medically unnecessary RPPs. These RPPs were more lucrative than solely performing and billing Medicare for COVID-19 tests. The Medicare reimbursement for the RPP tests amounted to 10 times more than the reimbursement total for COVID-19 tests.

The RPPs that GTI ran from June 2020 to January 6, 2021, were “stacked” on top of COVID-19 tests. Specifically, the RPPs were combined with COVID-19 tests when long-term care facilities sought only COVID-19 tests. The RPP tests were not based on an individualized assessment of each beneficiary’s needs by the beneficiaries’ physicians. Instead, GTI ran RPPs on every resident in a facility, regardless of if the resident displayed symptoms warranting the RPPs. Nearly every beneficiary in a facility received the same exact panel of respiratory tests from GTI, attesting to the lack of individualized assessment.

“Kickback arrangements to induce patient referrals for the purpose of billing federal health care programs for medically unnecessary diagnostic tests is inexcusable,” Hayes said. “This settlement is a testament to our continued commitment to protecting both patients and the public fisc that fund federal health care programs.”

“This settlement underscores our agency’s steadfast commitment to investigating alleged Anti-Kickback Statute and False Claims Act violations targeting the Medicare program,” Dixon said. “Ensuring the integrity of federal health care programs is a chief objective for HHS-OIG and our law enforcement partners.”

U.S. Attorney Hayes commended the HHS-OIG for its work in the investigation.  Ms. Hayes also thanked Assistant U.S. Attorney Tarra DeShields, District of Maryland, and Trial Attorneys Kelly McAuliffe and Asha Natarajan, DOJ Civil Division – Fraud Section, who jointly handled this case. 

The United States’ settlement in this matter 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 the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

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

For more information about the Maryland U.S. Attorney’s Office, its priorities, and resources available to report fraud, visit justice.gov/usao-md and justice.gov/usao-md/community-outreach.

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