Seattle – One defendant has pleaded guilty, and three others and a physician- owned testing lab have been indicted following the investigation of kickbacks in connection with laboratory testing services. The grand jury returned indictments on November 6, 2019, against JAE LEE, 48, of Bellevue, RICHARD REID, 50, of Astoria, Oregon, KEVIN PULS, 54, of Bellevue, and Northwest Physicians Laboratory of Bellevue, Washington. Both the company and the individual defendants are scheduled to make their first appearance in U.S. District Court in Seattle on December 5, 2019.
Northwest Physicians Laboratory (NWPL) and its relationship to Molecular Testing Labs (MTL) of Vancouver, Washington, are described in the plea agreement of STEVEN P. VERSCHOOR, 52, of Boise, Idaho, a co-founder of MTL. VERSCHOOR pleaded guilty on October 30, 2019, admitting that he paid kickbacks to NWPL for referring urine tests to be performed at MTL. According to the plea statements, starting in 2014, MTL agreed to pay NWPL as much as $100,000 per month to send patient urine tests to the Vancouver lab. NWPL is physician-owned, and for that reason could not test urine samples for patients covered by government health programs such as Medicare, Medicaid, and TRICARE. In order to conceal the payment of the kickbacks, MTL and NWPL described the fees as being for marketing services; however, VERSCHOOR was not aware of any marketing services being performed. In all, MTL paid NWPL $450,000. In exchange, MTL was able to bill the government more than $2,000,000 for urine testing services.
In December 2018, MTL agreed to pay $1,777,738 to settle allegations that it violated the False Claims Act by paying illegal kickbacks to obtain referrals for government healthcare insurance programs. According to the settlement, between August 2014 and July 2015, the government claimed that MTL made payments to local laboratories in exchange for referrals of Medicare and TRICARE program business, in violation of the Anti-Kickback Statute. Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services. The False Claims Act and the Anti-Kickback Statute function, in part, to discourage such behavior.
The indictment charges NWPL and the three executives with conspiracy to both solicit kickbacks and pay kickbacks. The indictment charges four additional counts of receipt of kickbacks.
Conspiracy to pay kickbacks involving federal healthcare programs is punishable by up to five years in prison. Receipt of kickbacks involving federal healthcare programs is punishable by up to 10 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
VERSCHOOR is scheduled to be sentenced by U.S. District Judge James L. Robart on January 21, 2020. VERSCHOOR has agreed to pay $461,752 in restitution. Some of that amount may be paid by the MTL in its settlement with DOJ.
The case is being investigated by the FBI, Health and Human Services Office of Inspector General (HHS-OIG), and the Defense Criminal Investigative Service (DCIS).
The case is being prosecuted by Assistant United States Attorneys Brian Werner and Matthew Diggs.