San Diego Laboratory Phamatech Agrees to Pay $3 Million to Settle Fraudulent Medicare Billing Case

San Diego-based Phamatech, Inc. and its CEO and founder, Tuan Pham, have agreed to pay $3,043,484 to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for laboratory drug-testing services. Phamatech is a medical technology company that manufactures diagnostic devices and provides laboratory testing including for drugs and alcohol. The United States alleged that Phamatech improperly paid a medical clinic to induce it to refer orders for laboratory drug-testing to Phamatech and consequently received government reimbursement for those tests in violation of the federal Anti-Kickback Statute and the False Claims Act. Specifically, the United States alleged that Phamatech paid kickbacks to Imperial Valley Wellness (“IVW”), a medical practice group, to induce IVW to order laboratory testing for its patients enrolled in Medicare. For about two years, Phamatech allegedly paid IVW a per-specimen fee in exchange for IVW’s referral of urine samples from Medicare beneficiaries. The government further alleged that many of the samples that IVW referred to Phamatech for testing under this arrangement were not medically necessary and therefore not lawfully eligible for Medicare reimbursement.

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