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Genetic Testing Company and Three Principals Settle FCA Allegations for $42.6 Million

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Genetic Testing Company and Three Principals Settle FCA Allegations for $42.6 Million

On October 9, 2019, New Orleans-based laboratory company UTC Laboratories Inc. (RenRX) agreed to pay $41.6 million, and its three principals agreed to collectively pay an additional $1 million, while admitting no liability, to resolve six qui tam lawsuits pending in the U.S. District Court for the Eastern District of Louisiana. The lawsuits alleged that RenRX and its principals violated the False Claims Act by paying kickbacks in exchange for referrals for pharmacogenetic testing, and for performing medically unnecessary testing billed to Medicare. The alleged kickbacks included cash payments and the referring physicians’ participation in the Diagnosing Adverse Drug Reactions Registry, a clinical trial. As part of the settlement, RenRX also agreed to be excluded from participation in any federal health care program for twenty-five years.

Read the DOJ press release here.

Jury Finds Texas Physician Guilty in $16 Million Medicare Fraud Scheme

After a six-day trial, a Texas federal jury found a physician guilty of one count of conspiracy to commit health care fraud, one count of conspiracy to solicit and receive health care kickbacks, and two counts of false statements, for her role in an alleged $16 million Medicare fraud scheme. The evidence presented at trial showed that, from January 2012 to August 2016, the defendant and her co-conspirators signed false and fraudulent “plans of care” and other medical documents for purported home health services at HMS Health and Wellness Center, PLLC, the medical clinic the defendant owned and operated. The defendant and her co-conspirators submitted claims to Medicare that indicated falsely that the patients qualified for and received home health services under Medicare when they, in fact, paid the patients to sign up for home health services that were not medically necessary, not provided, or both. The defendant also charged illegal kickbacks by charging a fee for certifying and recertifying patients for home health services that the home health agencies, rather than the patients, would pay. Several other co-conspirators have pled guilty or been found guilty for their respective roles in the scheme.

Read the DOJ press release here.

Medical Marketing Company Owner Sentenced to 70 Months in DNA Testing Fraud Scheme

The owner of medical marketing company, DBL Management LLC, was sentenced to 70 months in prison for his role in a $2.2 million scheme to defraud Medicare. After a one-week trial, a jury found the defendant guilty of one count of conspiracy to defraud the United States and pay and receive illegal health care kickbacks, and one count of structuring cash withdrawals to avoid reporting requirements. The evidence showed that the defendant received kickbacks from a genetic testing company for each DNA swab that he arranged to be referred to the laboratory, and to obtain those DNA swabs, the defendant in turn paid illegal cash kickbacks and bribes to medical clinics in exchange for their referrals of Medicare beneficiaries. The defendant directed the owners of the medical clinics to collect DNA from all patients, regardless of whether there was a medical need for DNA testing, and the clinics provided food and other benefits to beneficiaries to induce them to visit the clinics. The test results also were not provided to the beneficiaries—co-conspirators at the clinics obtained prescriptions for the testing and paid the doctors, often without any patient interaction. The defendant is currently serving a 14-year prison sentence on separate health care fraud, money laundering, and identify theft charges arising from a guilty verdict in December 2015. While on pretrial release awaiting trial on those charges, the defendant established shell companies and recruited others to continue this scheme. The defendant will serve his 70-month sentence consecutively with the sentence previously imposed.

Read the DOJ press release here.

Chiropractor to Pay $100,000 to Resolve FCA Liability Arising from Billing of Stivax Devices

A chiropractor and his practice, Ovation Center of Integrative Medicine (Ovation), agreed to pay $98,497.62 to resolve allegations that they improperly billed electro-acupuncture devices as surgical procedures reimbursable by federal health care programs, in violation of the False Claims Act.

From July 2016 through August 2017, the chiropractor and Ovation allegedly billed Medicare for the surgical implantation of neurostimulator electrodes, a procedure for which Medicare typically pays thousands of dollars. The chiropractor, however, did not provide that procedure; instead, a nurse practitioner applied an electric acupuncture device in an office, a non-surgical setting, for which Medicare does not offer any reimbursement. The physician and Ovation also allegedly submitted these claims to Medicare using the National Provider Identification number of a physician who did not perform or supervise the procedure. In May 2018, SafeGuard Services LLC, Medicare’s Northeastern Unified Program Integrity Contractor (“UPIC”), notified Ovation that it was initiating a post-payment medical review of these claims, and Ovation conceded that the claims were inappropriate and agreed to voluntarily repay Medicare for the claims UPIC had identified. The settlement did not include a determination of liability.

Read the DOJ press release here.

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