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Former Billing Manager Reports Laboratory for Violating Anti-Kickback Statute and Receives $1 Million Qui Tam Award

April 11, 2023.  Healthcare fraud is a significant problem in the United States, costing taxpayers billions of dollars annually. Many individuals have become whistleblowers by reporting fraudulent activities of their employer, helping the government recover millions of dollars. A former billing manager filed a qui tam lawsuit against Genotox Laboratories, alleging that they violated the Anti-Kickback Statute. The whistleblower’s case was successful with the lab paying a $5.9 million settlement for civil claims as well as entering an eighteen-month Deferred Prosecution Agreement for criminal charges, and the billing manager received a $1 million of the settlement as a reward for reporting fraud.

The Anti-Kickback Statute (AKS) is a federal healthcare law designed to prevent healthcare fraud and abuse by prohibiting the exchange of anything of value to induce or reward referrals or generate business. Individuals or entities that violate AKS can face civil and criminal penalties. In the Genotox Laboratories case, the laboratory was paying independent contractor sales representatives and marketing firms to influence healthcare practitioners to refer patients to Genotox for laboratory testing. This practice violates AKS by exchanging payments to generate business, especially government-funded healthcare. Genotox admitted liability for working with these “1099” representatives, who were paid proceeds from Genotox’s reimbursements for Medicare, Railroad Retirement Board (RRB), and TRICARE claims. The laboratory additionally allegedly submitted false claims over 8 years to Medicare, RRB, and TRICARE for tests that were not reasonable and necessary or were not covered services.

In qui tam lawsuits, whistleblowers can receive a portion of the recovered funds, commonly referred to as the “relator’s share.” In this case, the billing manager received a $1 million award for his role in exposing Genotox’s fraudulent activities. The substantial award provides a strong incentive for healthcare industry employees to report fraudulent activities.

The government has established various channels for whistleblowers to report healthcare fraud, including the False Claims Act, which allows whistleblowers to file lawsuits on behalf of the government. In qui tam lawsuits, whistleblowers must have first-hand knowledge of the fraud and be the first to report it. Without the whistleblower’s reporting, the fraudulent activities would go unnoticed, and the government would continue to pay fraudulent claims.

The Genotox Laboratories case serves as a reminder that healthcare fraud is a significant issue and that whistleblowers can help recover the losses incurred by taxpayers. The Anti-Kickback Statute is one of the many federal healthcare laws that exist to prevent fraud and abuse. Unfortunately, many healthcare providers and laboratories continue to violate these laws. However, with increased whistleblowing, the government can catch perpetrators and recover funds lost to fraud. If you have information regarding healthcare fraud, you may have the opportunity to be a whistleblower and receive a substantial award for your efforts.

If you would like to report Medicare, TRICARE, or other government-funded healthcare program fraud, 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

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