Bostwick Laboratories has agreed to pay $503,668 to resolve civil fraud allegations that its sales representatives made illegal payments to physicians to induce them to enroll patients in a clinical study using the lab’s services, the Justice Department announced Aug. 20 (
United States ex rel. Gluck v. Bostwick Labs, Inc., E.D.N.Y., No. 09-cv-4136).
The settlement between the government and Bostwick of Uniondale, N.Y., stemmed from a qui tam, or whistleblower, action filed in 2009 by urologist Robert Gluck in the U.S. District Court for the Eastern District of New York.
Approximately $100,000 of the settlement amount will go to Gluck as the relator’s share, plus some $67,000 in attorneys’ fees. Gluck was among the physicians approached by Bostwick about participating in the study, the government said.
The illegal payments to enroll patients in the study served to induce certain physicians to use Bostwick’s laboratory testing services, some of which were not medically necessary under the circumstances, the government said. In settling, Bostwick made no admission of liability.
The study, “Determination of the Accuracy of PCA3Plus Urine Assay for the Detection of Prostate Cancer,” obligated physicians to send both the PCA3Plus urine assay for the PCA3Plus study and prostate biopsy samples for each patient to Bostwick, the government said. The biopsy samples otherwise could have been sent to any number of laboratories, according to the allegations.
Bostwick, which sponsored the study, “in effect paid those physicians to steer their prostate biopsy analysis business to its laboratories,” the government charged.
The lab then submitted claims to Medicare and the TRICARE military health plan seeking reimbursement for both the prostate biopsy test analysis and the PCA3Plus urine assay analysis for each patient enrolled in the study, even though the prostate biopsy was the “gold standard” for prostate cancer detection and the PCA3Plus urine assay was not medically necessary in such situations, the government said.
The settlement was announced by U.S. Attorney Loretta E. Lynch and Special Agent in Charge Tom O’Donnell of the New York Office of Inspector General for the Department of Health and Human Services.
“Decisions involving medical treatment and testing go to the heart of the doctor-patient relationship, and must be based on the needs of each patient and possibility of the advancement of science,” Lynch said in a statement. “They cannot and should not be based on illegal payments from laboratories. Our office is committed to stopping such inducements, and returning patient care to the forefront of the doctors’ decisions.”
“In order to ensure the best possible treatment for our nation’s Medicare population, it is important that the relationship between labs and physicians be free of any illegal inducements, and we will continue to investigate such allegations,” added O’Donnell.
Takeaway: Labs cannot pay physicians to get them to enroll patients in a clinical study using the lab’s services. Such payments are considered illegal inducements.
—Kimberly Scott
