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Mar 10, 2024 by |

San Francisco Whistleblower Attorney: Laboratory And Its Owner And CEO Agree To Pay Over $13 Million To Settle Allegations Of Kickbacks And Unnecessary Testing


Allegedly Illegal Kickbacks

Millions In Unnecessary Tests Alleged

Starting A False Claims Case

Fraud against the government costs taxpayers billions every year and the majority of fraudulent claims submitted to the government for payment arise from the healthcare sector.  To combat this fraud, private citizens help the government recover billions of dollars every year from those submitting false claims for government payments.  The cases are brought in federal courts throughout the country under the False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq.  The private individuals bringing the cases are referred to as “relators,” and the cases themselves are called “qui tam” cases. If the government recovers, the individuals bringing the lawsuits are eligible for rewards. 31 U.S.C. § 3730(d).   Relators of fraudulent conduct are often employees or managers, or former employees or managers, or (in healthcare cases) patients of the business engaging in the fraud.  Much fraud occurs in the healthcare field and false claims to the government are often accompanied by other infractions such as illegal kickbacks for medical referrals prohibited by the Anti-Kickback Statute and Stark Law.  42 U.S.C. § 1320a-7b (Anti-Kickback Statute); 42 U.S.C. § 1395nn (Stark Law).  If you have credible information of fraud against the government in violation of the FCA in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Recent Settlement[1]

In a recent press release by the U.S. Department of Justice (DOJ), a medical laboratory and its owner and Chief Executive Officer have agreed to pay to the United States $10,315,023 to resolve False Claims Act allegations involving illegal kickbacks and medically unnecessary laboratory testing. (Over $3 million will also be paid to settle State FCA allegations.) The settlement announced today resolves allegations concerning five types of kickbacks paid to induce referrals: commissions based on the volume and value of Medicare and Medicaid referrals, purported management services organization (MSO) payments, payments  disguised as consulting or medical director fees, direct kickbacks to one or more principals of certain substance abuse recovery centers to induce their referrals and supposed specimen collection fees to referring healthcare providers to induce referrals.

In addition, the government alleged that defendants submitted or caused false claims to be submitted to Medicare and Medicaid for laboratory tests that were not reasonable and necessary; not covered because they were identical orders of urine drug testing panels for all patients within a clinician’s practice without individualized decision-making; or not covered because they were improperly duplicative of other claims for urine drug testing for the same date of service, the same patient, and the same drugs.

“Kickbacks have no place in our healthcare system,” said U.S. Attorney Phillip R. Sellinger for the District of New Jersey. “Patients need to trust that health care referrals are made in their best interests, not in the interests of lining someone else’s pockets. We have pursued and will continue to pursue laboratories that enter into unlawful financial arrangements that waste taxpayer dollars and improperly influence healthcare providers.”

Starting A Qui Tam Action

Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims.  31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.)  If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1).   If the government declines to intervene, the relator may proceed with the litigation on his or her own.  31 U.S.C. § 3730(c)(3).

Contact Us

If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=””></a>.  In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases 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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