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Lab Fraud

Laboratory tests can be a confusing and sometimes stressful process to undergo. However, they can also provide clarity and necessary answers about patients’ health.

Unfortunately, when people take advantage of the system, they may manipulate billing processes or order unnecessary tests for patients. This takes a toll on the overall system, reduces the standard of care for those who rely on public funding, defrauds the taxpayer, and makes the testing process more difficult.

If you have information about laboratory fraud, contact a lab fraud whistleblower lawyer today. The experienced team at Tycko & Zavareei LLP is ready to help. We can explain the process and what proof will be admissible in court, as well as lay out the possibilities for receiving a financial award for your information. We can also ensure that your rights as a whistleblower are protected every step of the way. Our healthcare fraud attorneys are available for a complimentary confidential consultation.

What is Lab Fraud?

Lab fraud falls under the larger category of healthcare fraud in qui tam law. Laboratory fraud occurs often in the billing stage, although it may also involve prescribing unnecessary tests or treatments for patients.

Lab fraud may be perpetrated by billing administrators, doctors, insurance agents, or other medical professionals. It may involve larger schemes and networks between medical facilities and can be a large or small-scale operation. At its worst, it may also harm vulnerable patients who turn to laboratories for diagnostics and understanding of conditions that are causing them pain and discomfort.

Examples of Lab Fraud

Lab fraud is usually committed when laboratories attempt to misappropriate government funds to which they are not entitled. Laboratories may commit fraud by doing any of the following:

  • Billing Medicare, Medicaid, the VA, or other government funds for unnecessary tests, particularly if the physician did not request that the test be performed.
  • Billing Medicare or Medicaid for a higher amount than a test actually costs, known as “upcoding.”
  • Charging public insurance for a bundle of tests rather than just one, or unbundling a group of tests in order to bill each test separately, in order to receive higher payouts from insurance at the cost of the taxpayer.
  • Providing medical professionals and/or facilities with kickbacks in exchange for referrals or their business. An example of a kickback scheme is a laboratory gifting physicians with money and other financial incentives in exchange for them using their lab for testing.

DOJ Actions Involving Laboratories

Unfortunately, lab fraud is very much present in today’s healthcare landscape. In April 2022, the Department of Justice filed a False Claims Act complaint against two major laboratories. The complaint alleges a kickbacks scheme wherein two laboratories, True Health Diagnostics LLC and Boston Heart Diagnostics Corporation, may have conspired with hospitals to have testing done solely at their locations. If true, the laboratories used recruiters to make payments disguised as investment returns to participating doctors in their scheme.

According to Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, “the Department of Justice is committed to holding accountable individuals and entities who commit and profit from healthcare fraud.” The Division Head continued, “We will continue to pursue those who enter into unlawful financial arrangements that waste taxpayer dollars, improperly influence healthcare providers’ medical judgments and subject patients to unnecessary testing or other services.”

The Department of Justice action was brought to court under the False Claims Act, a law that allows whistleblowers to receive a portion of the government’s overall financial recoupment in the event of a successful lawsuit. However, the purported scheme was also in violation of the Anti-Kickback Statute, as well as the Stark Law.

The Role of a Whistleblower in Fighting Lab Fraud

Whistleblowers are often the first and best line of defense against laboratory fraud, given the complex nature of the crime. Insider information is often required to expose kickback schemes, improper billing, and other attempts to misappropriate taxpayer funds.

If you have information about attempts to improperly draw down Medicaid, Medicare, VA funds, or other government monies with unscrupulous laboratory testing, contact the experienced law team at Tycko & Zavareei LLP. Our lawyers have years of expertise in qui tam law and are specialized in providing whistleblower representation under the False Claims Act.

Our settlements have numbered in the millions of dollars for brave individuals who come forward to report fraud, waste, and corruption, especially in the field of healthcare. For example, in a recent case of lab fraud represented by the law firm of Tycko & Zavareei LLP, partner Jonathan Tycko represented a whistleblower who came forward to report actions taken by a major toxicology laboratory owned by Sterling Healthcare, doing business as Cordant Health Solutions. In this case, the whistleblower alleged that at least two major kickbacks were provided to important clients in order to incentivize them to provide business to the laboratory. This case settled for almost $12 million, providing a significant financial award to the whistleblower who came forward with information that led to the recoupment.

Importance of Reporting Lab Fraud

Reporting lab fraud is the ethical choice. It helps ensure that:

  • Patients receive the highest standard of care
  • Patients do not undergo unnecessary and sometimes dangerous testing just for a financial incentive
  • Taxpayer funds are respected
  • Medicare and Medicaid are available to provide for the neediest Americans
  • Unethical medical providers can be reported

Additionally, the False Claims Act provides certain incentives for those who come forward with the truth. If you have information that helps lead to the recovery of misappropriated government funds, you may be eligible for a financial award. According to the False Claims Act and certain state laws, a whistleblower may receive up to 30% of the government’s total award in a qui tam case. In cases of laboratory fraud, this amount can easily number into the hundreds of thousands or even millions.

Whistleblower Protections

Under state and federal law, whistleblowers are afforded certain protections. Retaliation against whistleblowers by their employers is prohibited. Examples of prohibited actions include but are not limited to:

  • Reduction of pay
  • Reduction of hours
  • Changes to the terms of a whistleblower’s employment
  • Harassment in or out of work
  • Demotion or suspension
  • Termination due to a whistleblower’s protected disclosure

Becoming a Whistleblower in a Lab Fraud Case

The number one mistake that whistleblowers make is waiting too long to come forward with the truth. Not reporting lab fraud might allow time for valuable evidence to be destroyed or compromised and could implicate you in an illegal scheme to defraud the federal government from funds.

Contacting a qualified lab fraud whistleblower lawyer may be the best way to protect yourself. The team at Tycko & Zavareei LLP can advise you about your rights and protections against retaliation. We can also caution you against taking certain kinds of proof that may backfire in your case and liaise with Department of Justice professionals who may choose to investigate.

Finally, we can look out for your best interests in securing a financial reward for your information. As a whistleblower, you deserve to have someone looking out for the value of your information and efforts to uncover the truth. Our team can be by your side every step of the way throughout your potential case.

Contact the law firm of Tycko & Zavareei LLP for a confidential consultation at no cost to you to find out if you may have a case. Do not wait to do the right thing.

Contact a Whistleblower Attorney to Report Lab Fraud

Th importance of speaking to an experienced lab fraud attorney cannot be understated. A qui tam lawyer at our firm can assist with evidence gathering, protect you from implicated liability, increase your case’s chances of getting picked up by the government, follow up with the investigation, and advocate for the highest possible whistleblower reward on your behalf. Additionally, if your employer retaliates against you for reporting the wrongdoing, our lab fraud attorneys can help you hold them accountable. Call Tycko & Zavareei LLP today to get started.

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