The Justice Department amended its complaint in a laboratory testing fraud case to add six physicians in Texas. The case alleges False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute and the Stark Law. The amended complaint further alleges that the six physicians caused claims to be improperly billed to federal healthcare programs for medically unnecessary laboratory testing. According to the United States’ complaint, the six physician defendants received thousands of dollars in kickbacks in return for their referrals of laboratory testing. The complaint alleges that laboratories True Health Diagnostics LLC (THD) and Boston Heart Diagnostics Corporation (BHD) conspired with small Texas hospitals, including Rockdale Hospital dba Little River Healthcare (LRH), to pay physicians to induce referrals to the hospitals for laboratory testing, which was then performed by THD or BHD. As alleged in the complaint, the hospitals paid a portion of their laboratory profits to recruiters, who in turn kicked back those funds to the referring physicians. The recruiters allegedly set up companies known as management service organizations (MSOs) to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals. The complaint alleges that laboratory tests resulting from this referral scheme were billed to various federal healthcare programs, and that the claims not only were tainted by improper inducements but, in many cases, also involved tests that were not reasonable and necessary.
