Click Fraud Protection Stopping the Bleeding: Whistleblowers Receive $5.6 Million for Pursuing Lab Kickback Scheme Qui Tam Lawsuit - TZ Legal - Fraud Fighters
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HomeNewsStopping the Bleeding: Whistleblowers Receive $5.6 Million for Pursuing Lab Kickback Scheme Qui Tam Lawsuit

Stopping the Bleeding: Whistleblowers Receive $5.6 Million for Pursuing Lab Kickback Scheme Qui Tam Lawsuit

February 28, 2023. The United States Department of Justice settled a qui tam case against Laboratory Corporation of America Holdings (Labcorp). Under the terms of the settlement, Labcorp paid $19 million to resolve allegations that the lab paid healthcare providers to induce them to send patients in need of lab work to Labcorp and submitted false claims to Medicare. There were two whistleblowers who pursued this case over ten years. The whistleblowers worked for a small physician’s office in South Carolina and observed the kickback scheme taking place. For reporting this healthcare fraud scheme, the relators were awarded $5.6 million or approximately 29.5% of the settlement. Relators can earn up to 30% of a settlement under the False Claims Act.

According to the allegations, the fraud scheme had several twists and turns. The main issue was that Labcorp submitted false claims to Medicare for phlebotomy services that healthcare providers ordered from Labcorp, Health Diagnostics Laboratory, Inc. (HDL), and/or Singulex, Inc. (Singulex). From 2010-2014, relators alleged that HDL and Singulex made cash payments to providers, disguised as sham “processing fees,” as payment for referrals of high cholesterol and coronary disease risk factors testing. Labcorp allegedly provided free blood draw and processing services for physicians who were on the take from HDL and Singulex. Under the Anti-Kickback Statute, healthcare providers cannot accept anything of monetary value in return for referring patients covered by federally-funded healthcare programs; thus since the healthcare providers were paid to refer their patients, including Medicare and Medicaid beneficiaries, the claims submitted to the federally-funded programs were tainted by kickbacks.

This settlement agreement with Labcorp serves as a reminder to other healthcare providers and laboratories that whistleblowers are watching, and the government will take action if they engage in illegal activities, such as kickbacks or false claims submissions. The settlement also highlights the importance of qui tam lawsuits in helping to detect and root out healthcare fraud. The qui tam provision of the False Claims Act provides a powerful incentive for whistleblowers to report any fraudulent activity they may come across and helps the Department of Justice hold accountable those who violate the False Claims Act.

As the U.S. Attorney for the District of South Carolina said about the case, “Health care decisions should be based on what is in the best interest of the patient, and not on financial incentives and related schemes.” The relators noted in the complaint that these tests for which physicians were paid to order were frequently unnecessary and duplicative. Government-funded healthcare programs and patients are not a cash cow for unscrupulous providers, and the whistleblowers in this case rightly advocated for patients by reporting a harmful fraud scheme.

HDL and Singulex were previously parties to a $48.5 million False Claims Act qui tam settlement in 2015 for this kickback scheme.

Read the unsealed complaint and settlement agreement.

If you would like to report laboratory and testing 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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