A group of laboratory marketers, healthcare providers, and associated entities have agreed to pay a total of $1,137,914 to resolve allegations under the False Claims Act. These parties were accused of engaging in laboratory kickback schemes that violated the Anti-Kickback Statute. As part of the resolution, they have agreed to cooperate with ongoing investigations and litigation involving other participants in the alleged schemes.
The Anti-Kickback Statute holds both sides of an illicit arrangement accountable. The settlements, announced on January 7, address allegations that laboratory marketers paid or conspired to pay kickbacks to healthcare providers in exchange for laboratory referrals, leading to false Medicare claims. The settlements also address allegations that healthcare providers received kickbacks in return for these referrals.
Two laboratory marketers reached settlements resolving claims of paying kickbacks to induce healthcare providers to order laboratory tests from specific laboratories in New Jersey, Florida, Virginia, and Texas. One marketer agreed to pay $400,000, with claims that from August 2018 to July 2022, he and his marketing company facilitated referrals to laboratories in Kenilworth, New Jersey; Dallas, Texas; and Orlando, Florida. In return for these referrals, commissions were allegedly paid to the marketer’s company. To incentivize these referrals, the marketer allegedly provided healthcare providers with kickbacks disguised as investment returns from purported management service organizations (MSOs). Additionally, this marketer is now excluded from participating in federal healthcare programs for ten years.
The second marketer, along with his company, agreed to pay $140,000. From February 2019 to February 2021, he allegedly paid kickbacks to a healthcare provider in Virginia in exchange for ordering tests from laboratories in Kenilworth, New Jersey, and Chester, Virginia. These payments were reportedly disguised as investment returns, but were actually tied to the volume and value of the provider’s referrals.
Healthcare providers involved in the kickback schemes have also reached settlements. One provider agreed to pay $228,482 for accepting payments from an MSO in exchange for referring patients for laboratory testing in Houston, Texas, from January 2016 to November 2018. Another provider and his practice settled for $206,987. Between February 2019 and February 2021, he received payments disguised as investment returns for ordering testing from laboratories in New Jersey and Virginia. A third provider, along with his practice, agreed to pay $99,125 for accepting payments from an MSO to order tests from a laboratory in Houston from April 2017 to September 2018.
Additionally, a medical clinic and its owner agreed to pay $63,320 for receiving payments from MSOs in return for referring patients to laboratories in New Jersey, Texas, and Virginia between June 2017 and July 2022.
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. It 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 prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, such as bribes or rebates. They can be given in cash or in kind. Failure to promptly report a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points
- Ensure your policies and procedures for preventing and reporting anti-kickback violations are current. Update them as necessary to align with federal and state regulations.
- Provide comprehensive training for all staff on federal and state anti-kickback statutes, including what constitutes a kickback and the reporting process for concerns or suspected violations. Emphasize the importance of prompt reporting and document all training sessions. Store signed documents 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, Inc. for informational purposes only and is not intended to provide legal advice.*
