Florida Businessman Daniel Hurt to Pay Over $27 Million for Medicare Fraud in Connection With Cancer Genomic Tests

NEWARK, N.J. – Daniel Hurt, who owned and/or operated Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC and Sonoran Desert Pathology Associates LLC, has agreed to pay over $27 million to resolve allegations that he and his companies conspired with others to violate the False Claims Act (FCA) by submitting false claims to, and receiving payments from, Medicare for cancer genomic (CGx) tests that were not medically necessary and were procured through illegal kickbacks. Hurt, Fountain Health, Verify Health, Landmark Diagnostics, First Choice and Sonoran Desert Pathology also agreed to be excluded by the Department of the Health and Human Services Office of Inspector General (HHS-OIG) from Medicare, Medicaid and all other Federal health care programs. Hurt previously pled guilty to criminal healthcare fraud for these offenses. The civil settlement is based on Hurt’s ability to pay.

The United States alleged that Hurt, his companies and others conspired to knowingly submit false claims for CGx tests that were not medically necessary to treat or diagnose a condition, and that Hurt received and paid kickbacks in exchange for Medicare referrals, in violation of the Anti-Kickback Statute (AKS). In particular, the United States alleged that, from January 2019 to November 2021, Hurt conspired with telemarketing agents to solicit Medicare beneficiaries for “free” CGx tests; with telemedicine providers to “prescribe” CGx tests that were not medically necessary; with reference laboratories to conduct the CGx tests and with billing laboratories and a hospital to submit claims for payment to CMS.

“We will not tolerate those who prey on older Americans to defraud Medicare,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As this settlement reflects, we will use our available resources to protect federal health care programs and the beneficiaries they serve.”  

“Submitting false claims for medically unnecessary services to Medicare and Medicaid jeopardizes the integrity of vital health care programs, and we, along with our law enforcement partners, will continue to make sure those who attempt to do so are held accountable,” stated Deputy Inspector General of Investigations Christian J. Schrank for HHS-OIG. “This substantial settlement underscores our steadfast dedication to safeguarding federal health care programs.”

This settlement includes the resolution of allegations brought in three cases filed under the qui tam or whistleblower provisions of the FCA, including an action filed by Robert Gerstein, a minority owner of Sonoran Desert Pathology, where he worked for Hurt, running the billing operations for CGx tests. Under the FCA, private parties can file an action on behalf of the United States and receive a portion of any recovery. Under today’s resolution, Relator Gerstein will receive up to $4.7 million or 17% of the government’s recovery.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the Corporate/Financial Litigation Section, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Attorney’s Office for the Southern District of Florida, and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-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 the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Assistant U.S. Attorney David Dauenheimer (D.N.J.), Trial Attorney Samson Asiyanbi of the Fraud Section, Trial Attorneys Augustus Curtis and Andrew Warner of the Corporate/Financial Litigation Section, Assistant U.S. Attorneys Jeremy Bloor (M.D. Fla.) and Rosaline Chan (S.D. Fla.), and the Miami Regional Office of HHS-OIG.

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