November 14, 2023. A clinical laboratory has agreed to pay $1,195,845 to settle allegations of violating the False Claims Act. Florida-based Genesis Reference Laboratories LLC (Genesis) allegedly paid illegal kickbacks to healthcare providers in violation of the Anti-Kickback Statute in exchange for laboratory testing referrals. There was no whistleblower in this False Claims Act settlement; however, if someone with inside knowledge had reported this alleged misconduct via a qui tam lawsuit, they would have been entitled to receive 15-25% of the government’s recovery.
According to the settlement agreement, the lab worked with three marketing companies to promote Genesis’ laboratory testing services to healthcare providers in Missouri and Texas. The marketing companies then allegedly “kicked back” some of the testing revenue to the referring providers under the guise of investment returns from management services organizations. Despite knowledge of these kickbacks, Genesis allegedly submitted claims to Medicare for laboratory testing ordered by the referred healthcare providers, violating the False Claims Act. The type of lab testing that Genesis was paying for referrals for was urine drug testing (UDT), which alleged fraudsters in other cases have targeted previously.
The Anti-Kickback Statute prohibits remuneration to induce referrals of services covered by federal healthcare programs. Kickbacks make healthcare about money and not patients and make healthcare providers’ judgment questionable. The U.S. Attorney for the District of New Jersey said about this case, “Kickbacks have no place in our healthcare system. Health care providers and clinical laboratories are on notice that benefits in exchange for referrals are improper and may violate the Anti-Kickback Statute.”
The government’s pursuit of such cases reflects its commitment to combat healthcare fraud, using tools such as the False Claims Act. Under the False Claims Act, whistleblowers—known as relators—can bring original information to the government’s attention and be rewarded for reporting fraud. Over $36 million has been recovered in related cases involving kickbacks to healthcare providers paid through management services organizations. As the Special Agent in Charge for the Department of Health and Human Services Office of Inspector General (HHS-OIG) noted about the case, “Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.” Whistleblowers play a major role in maintaining the integrity of government-sponsored healthcare programs.
If you would like to report lab fraud or violations of the Anti-Kickback Statute, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.