The US has settled a civil fraud lawsuit against Balance Diagnostics USA, LLC, a diagnostic testing facility based in Cedarhurst, New York, for paying kickbacks to physicians and their medical practices in the form of sham “rent payments” to secure patient referrals in violation of the federal Anti-Kickback Statute (the “AKS”). Specifically, the settlement resolves claims that from January 2009 through December 2019, Balance paid hundreds of thousands of dollars to over 100 physicians and their practices in the New York City area (the “Providers”) to induce them to refer patients for diagnostic testing services performed by Balance staff at the Providers’ offices. The US alleges that the so-called rent payments were based entirely upon the number of patient referrals and, in many instances, were well above the fair market rental value of the leased office space.
Under the settlement, Balance will pay the U.S. $1,725,850 and has admitted and accepted responsibility for conduct alleged in the US Complaint, including that Balance determined the amount of rent to be paid pursuant to the subleases by taking into account the anticipated volume or value of the patients referred. Balance has also agreed to pay the State of New York $774,150 to resolve state law claims, for a total combined recovery of $2.5 million. Balance has executed judgments in favor of the U.S. for $4,280,108, and in favor of the State of New York for $1,919,892, for a total combined amount of $6.2 million, which may be enforced if Balance fails to make the payments required under the settlements.
