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Third Settlement in Medical Lab Kickback Scheme | Tycko & Zavareei LLP Represented Whistleblower in Original Qui Tam Suit

October 21, 2021. The United States Department of Justice settled a False Claims Act/Anti-Kickback Statute civil matter against the Chief Executive Officer of a now-defunct medical testing lab for $1.1 million. This is the third settlement with Northwest Physicians Laboratory (NWPL) following a whistleblower reporting misconduct in 2015. Jonathan Tycko of Tycko & Zavareei LLP represented the whistleblower in the qui tam suit that settled last year for $11.9 million, of which the whistleblower received 20%. In this latest settlement with the lab’s former CEO, the whistleblower received 15% of the government’s recovery, as the whistleblower’s initial report of misconduct prompted investigation of NWPL and its leaders.

The timeline of this kickback scheme is thus: between 2013 and 2015, Sterling Healthcare Opco LLC d/b/a Cordant Health Solutions (Cordant) of Tacoma and Denver and Molecular Testing Labs (MTL) paid kickbacks to NWPL for referrals of Medicare, Medicaid, and TRICARE patients. The labs concealed these payments by referring to them as “administrative service fees” for marketing services which never occurred. Submitting claims to government-funded healthcare programs for patients obtained in a kickback scheme constitutes a violation of the False Claims Act. Moreover, some of the referrals were for medically unnecessary urine drug tests. The whistleblower reported this misconduct in 2015.

In December 2018, MTL paid $1,777,738 to settle False Claims Act and Anti-Kickback Statute allegations. In the following December, three executives of NWPL were indicted on criminal charges for these kickbacks. By June of 2020, the DOJ settled with Cordant, and this month the CEO of NWPL settled the civil allegations against his now-defunct lab.

Medical providers have a conflict of interest in ordering testing from labs owned by provider groups, with some exceptions or safe harbors under the Anti-Kickback Statute. As noted in the releases about the 2020 settlement and the 2021 civil case, “Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.”

Trading patient referrals for millions of dollars to defraud government healthcare programs erodes the integrity of both those programs and the medical profession. The Department of Justice needs whistleblowers to report fraud involving providers paying for referrals of government-insured patients. Thanks to the actions of our whistleblower client, the government has recovered over $14.8 million in False Claims Act settlements.

If you would like to report Medicare 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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