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Justice News

Department of Justice
U.S. Attorney’s Office
District of South Carolina

FOR IMMEDIATE RELEASE
Monday, November 30, 2015

Piedmont Pathology Associates, Inc., and Piedmont Pathology, P.C. Settle False Claims Act Cases for $500,000

Contact Person: Beth Warren (803) 929-3000

COLUMBIA, South Carolina ---- United States Attorney for the District of South Carolina Bill Nettles announced today that Piedmont Pathology Associates, Inc. and Piedmont Pathology, P.C., a diagnostic anatomic pathology group located in Hickory, North Carolina, has agreed to pay the United States $500,000 to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians. 

Mr. Nettles said, “Combatting fraud against the government is a priority in this office; and importantly, holding accountable health care providers who have improper financial relationships with referral sources has been a focus.  Financial relationships between physicians for referrals can alter a physicians’ judgment as to what’s necessary and appropriate for a patient.  Our goal in this settlement was not only to recover money for improper healthcare claims, but to deter similar conduct and, in turn, promote health care affordability.”

The investigation of Piedmont Pathology was prompted by a whistleblower who filed a lawsuit under the qui tam provision of the False Claims Act.  The whistleblower was a former contract salesperson for the practice who witnessed a program where the practice would provide Electronic Medical Record (EMR) software licenses to various physicians’ practices in exchange for referrals.  The government found that Piedmont Pathology provided EMR software licenses at little to no cost to nine physicians’ practices close in time to when those practices entered contracts to refer specimens to their pathology lab. This conduct violated the Anti-Kickback Statute.  Claims submitted in violation of the Anti-Kickback Statute are considered tainted and are per se violations of the False Claims Act.  The False Claim Act allows the government to recover three times the actual damages caused by the improper claims and up to $11,000 in penalties per false claim.    

The False Claims Act allows individuals to file lawsuits on behalf of the government with allegations that fraud has been committed against the federal government.  Whistleblowers, referred to as “relators” in the False Claims Act, are entitled to share in any recovery received by the government.  In this case, the relator will receive 15% of the funds of the settlement, or $75,000.  She is also entitled to her costs and attorney fees.

This case was handled by Assistant United States Attorney Beth Warren.  The case was investigated by the Office of the Inspector General for the Department of Health and Human Services.

“Paying for referrals, as the government alleged, is little more than a thinly veiled bribe,” said Derrick Jackson, Special Agent in Charge with the Office of Inspector General, U.S. Department of Health and Human Services.  “Patients and taxpayers deserve better, and those who would defraud the system should expect to pay for their schemes.”

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.

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Updated November 30, 2015