On April 9, 2015, the Department of Justice (DOJ) announced that two cardiovascular disease testing laboratories based in Virginia and California agreed to pay the government $48.5 million to resolve allegations that it violated the Anti-Kickback Statue and the False Claims Act (FCA) by allegedly paying inducements to physicians for referring patients to its laboratories for testing. Health Diagnostic Laboratory Inc. (HDL) located in Richmond, Virginia will pay $47 million of the total settlement and Singulex Inc. located in Alameda, California will pay the remaining portion in the amount of $1.5 million. The government is also in the process of bringing lawsuits against Berkeley HeartLab, Inc., and BlueWave Healthcare Consultants and its owners and CEO’s for related violations.
The case began as a qui tam lawsuit filed by whistleblowers Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel. A qui tam lawsuit is a one brought by private citizens, but in the name of the government, to recover money obtained illegally from the government. Their qui tam lawsuit alleged that HDL, Singulex, and Berkeley offered monetary kickbacks to physicians who referred their patients to any of these laboratories for blood tests. The alleged inducements ranged from $10 to $17 of the physicians processing and handling fees for each referral, and patient co-pays and deductibles were also allegedly waived. The lawsuit further alleged that HDL and Singulex conspired with Bluewave to convince physicians to refer patients for medically unnecessary tests for which the federal government was then billed through government-funded healthcare programs such as Medicare.
When a patient is referred to a specialist or laboratory for further testing, it is expected that the physician and the laboratory have the patient’s best interest at heart. Referrals orchestrated for profit only, are a violation of the patients trust and puts the patients’ health at risk. For this reason, the Physician Self-Referral Statue (sometimes referred to as the Stark Law) and the Anti-Kickback Statue (AKS) prohibit anyone from knowingly and willfully offering, paying, soliciting, or receiving remuneration in order to induce business reimbursed under the Medicare or Medicaid programs. Violations of those statutes can also violate the FCA because laboratories that bill Medicare or Medicaid must certify that they are operating in compliance with those laws. Thus, if the labs are violating the Stark or AKS laws, those certifications are false or fraudulent. As alleged by the qui tam whistleblowers and later by the government, by paying kickbacks to physicians in exchange for patient referrals, HDL and Singulex knowingly violated the FCA. In order to avoid future violations of the FCA, a corporate integrity agreement between HDL and Singulex and the Department of Health and Human Services Office of Inspector General (HHS-OIG) was devised and provides for procedures and reviews that will help to combat any further indiscretions. HDL and Singulex are expected to abide by this agreement to the fullest measure.
If you have information concerning Medicaid or Medicare fraud by a testing laboratory, hospital, doctor or other healthcare provider, do not hesitate to take action. It is possible that you might be able to bring your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the U.S. government. A whistleblower who files a case against a company that has committed fraud against the government, may receive compensation of up to 30 percent of the amount ultimately recovered by the government.
Before filing your lawsuit, be sure to consult with an attorney familiar with the intricacies of the False Claims Act and qui tam lawsuits, as these attorneys are best equipped to help protect your rights and help you gain your share of any monetary reward from a potential settlement.
If you would like to consult with one of our False Claims Act attorneys concerning Medicare fraud or other forms of healthcare fraud, please fill out our Confidential Case Evaluation form, or call (202) 973-0900 to speak with a lawyer at the law office of Tycko & Zavareei LLP.