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Apr 19, 2024 by |

San Francisco False Claims Act Whistleblower Attorney: Laboratory Agrees To Pay $14.3 Million To Settle Kickback Allegations


High-Volume Commissions For Referrals Of Unnecessary Tests Alleged

Former Lab Manager To Receive $2.86 Million Reward

How Qui Tam Cases Work

Healthcare providers in the U.S., including hospitals and clinics, are subject to a number of statutes to prevent any fraudulent billing under government programs like Medicare and Medicaid.  When the providers violate those laws, they also violate the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733, for submitting false claims for payment to the government.  One of the underlying protections against fraud in the healthcare field is the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, which prohibits kickbacks to physicians for patient referrals for services covered by Medicare and Medicaid (known as Medi-Cal in California).   Individuals with information about this kind of scheme can be rewarded for bringing this kind of illegal practice to light.  31 U.S.C. § 3730(b).  The California whistleblower attorneys at Evans Law Firm, Inc. represents individuals who bring FCA cases based for any kind of fraud against Medicare or Medicaid or other government-sponsored healthcare programs.  If you have credible, original information of healthcare fraud, call us today at (415)441-8669 or toll-free at (888)-50EVANS (503-8267) and we can help.

Anti-Kickback Case Settlement

According to a recent U.S. Department of Justice (DOJ) press release,[1]  a clinical laboratory has agreed to pay $14.3 million to resolve allegations that it violated the Anti-Kickback Statute by paying volume-based commissions to independent contractor sales representatives to arrange for or recommend medically unnecessary urine drug tests and respiratory pathogen panels (RPPs). The settlement resolves allegations that, between April 2020 and December 2021, the lab and its owners paid contractor sales representatives to recommend RPPs to senior communities when the tests in actuality were unnecessary.  RPPs are an expensive panel that tests for many different respiratory pathogens, some of which are very rare, do not cause overlapping clinical syndromes and are found only in specific patient populations. To generate orders, Capstone’s independent sales representatives completed test requisition forms for RPPs using forged signatures of physicians who had only ordered other tests and sham diagnosis codes that did not reflect the medical conditions of the senior community residents receiving the tests. The lab allegedly then billed federal health care programs for these medically unnecessary tests and paid its sales representatives a commission for each test. A former manager at the lab initiated the qui tam action and will receive $2.86 million of the $14.3 million settlement.

How False Claims Act Whistleblower Cases Work

Cases such as this one are often initiated under the qui tam, or whistleblower, provisions of the FCA. 31 U.S.C. § 3730(b). The FCA allows private parties to sue on behalf of the government for false claims, and to receive a share of any recovery. 31 U.S.C. § 3730(b) (procedures for initiating qui tam actions).  The suit is filed confidentially and remains under seal giving the government time to review the allegations in the case.  If the government decides to intervene, the government essentially takes over the case.  If the government declines to intervene, the plaintiff has the right to continue the suit of their own. The whistleblowers stand to receive up to 15-30% of the settlement in accordance with 31 U.S.C. § 3730(d)(1) and (2).

Contact Us

If you have information of healthcare fraud against the federal government or the State of California occurring here in San Francisco or elsewhere in the State, contact Ingrid M. Evans at Evans Law Firm at (415) 441-8669, or toll-free at (888)-50EVANS (503-8267) or by email at <a href=””></a>.   In addition to False Claims cases, Ingrid also represents individual whistleblowers in qui tam cases involving bank fraud under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program

[1] Evans Law Firm, Inc. was not involved in the case in any way.

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