A Florida laboratory has agreed to pay $1,195,845 to resolve False Claims Act allegations that its marketers paid illegal kickbacks to healthcare providers to induce laboratory testing referrals, according to a Department of Justice press release on November 2, 2023. The laboratory has also agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged scheme.
The settlement resolves allegations that from 2019 to 2021 the laboratory paid marketing companies to arrange for and recommend that healthcare providers in Missouri and Texas order the laboratory’s tests, and the marketing companies kicked back a portion of those payments to referring healthcare providers, in violation of the Anti-Kickback Statute. The healthcare providers allegedly were paid using purported management services organizations (MSOs), which attempted to disguise the kickbacks as investment returns but actually offered the payments to healthcare providers to induce testing referrals to the laboratory.
The settlement resolves allegations that, despite knowing of the MSO kickbacks to healthcare providers and receiving those providers’ subsequent patient referrals, the laboratory nevertheless submitted to Medicare the claims for testing ordered by those providers, in violation of the False Claims Act.
“The payment of kickbacks by laboratories or their representatives to induce laboratory test referrals undermines the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue those who offer or receive kickbacks for patient referrals regardless of how those unlawful inducements are characterized or provided.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section; and the US Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Inspector General (HHS-OIG). The United States has recovered over $36 million relating to conduct involving MSO kickbacks to healthcare providers, including False Claims Act settlements with 41 physicians, two laboratories, four medical practices, three healthcare executives, and one office manager.
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients. The statute covers the payers of kickbacks—those who offer or pay remuneration—as well as the recipients of kickbacks—those who solicit or receive remuneration. The fact that a claim results from a kickback also may render it false or fraudulent, creating liability under the civil False Claims Act as well as the Anti-Kickback Statute.
Discussion Points
- Review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
