Home 5 News 5 Diagnostic Lab to Pay Nearly $10 Million to Settle FCA Allegations

Diagnostic Lab to Pay Nearly $10 Million to Settle FCA Allegations

by | Jul 20, 2022 | News, Open Content

BioReference Health LLC and its parent company have agreed to pay $9.85 million to resolve alleged violations of the False Claims Act.

One of the largest clinical labs in the US and its parent company are on the hook for $9.85 million to resolve allegations that it paid illegal kickbacks to physicians. Headquartered in New Jersey, BioReference Health LLC, formerly known as BioReference Laboratories, Inc., and its parent company, OPKO Health, Inc., are alleged to have paid rents to physician landlords that exceeded fair market value in order to induce referrals to the lab, according to a July 14 announcement by the U.S. Department of Justice.

Occurring between January 2013 and March 2021, the payments allegedly violated both the Physician Self‑Referral Law (Stark Law) and the Anti-Kickback Statute, the DOJ said in a statement. According to the statement, BioReference said it rented office space from the physician practices in question to use as Patient Service Centers, but inaccurately measured the amount of space the company would have exclusive use of, including “a disproportionate share of common spaces.”

Though BioReference and OPKO uncovered that their rental payments were above fair market value via an internal audit after OPKO acquired the lab company, “BioReference did not report or return any overpayments to federal health care programs,” the DOJ states.

The settlement resolves False Claims Act (FCA) allegations originally brought forward in a qui tam whistleblower lawsuit by a former BioReference and OPKO employee, who will receive a share of about $1.7 million. As part of the settlement, BioReference and OPKO will also pay the Commonwealth of Massachusetts $141,041 and the State of Connecticut $5,001 to settle allegations relating to those states’ False Claims Acts.1

In other key recent enforcement actions involving the healthcare industry:

July 12: The US filed a civil complaint against Fresenius Vascular Care, Inc., in federal court in Brooklyn relating to unnecessary and potentially harmful procedures the company allegedly performed on dialysis patients at nine centers across Long Island and New York City. These procedures were then allegedly billed to various federal healthcare programs to increase the company’s revenue.2

July 7: A West Virginia Hospital, Weirton Medical Center, agreed to pay $1.5 million to settle FCA allegations that it violated the Stark Law by paying referring physicians more than fair market value or making payments based on volume of referrals, then billing those payments to Medicare. The settlement was the result of a voluntary self-disclosure from the hospital about potential Stark Law violations.3

July 7: The medical director of two addiction treatment facilities was sentenced to 54 months in prison for a $112 million fraud scheme that involved billing for substance abuse services that were either medically unnecessary or never provided. According to the DOJ, Jose Santeiro, medical director of Second Chance Detox LLC, dba Compass Detox and WAR Network LLC, worked with others to admit patients for the facilities’ most expensive treatment, with patient recruiters offering kickbacks to encourage patients to attend the facilities’ programs, then giving those patients illegal drugs so they could be admitted for treatment at Second Chance Detox. Santeiro also billed for excessive, unnecessary drug tests that were never used in that treatment, the DOJ states.4

References:

  1. https://www.justice.gov/opa/pr/bioreference-laboratories-and-parent-company-agree-pay-985-million-resolve-false-claims-act
  2. https://www.justice.gov/usao-edny/pr/united-states-files-claims-alleging-fresenius-vascular-care-inc-defrauded-medicare-and
  3. https://www.justice.gov/opa/pr/west-virginia-hospital-pay-15-million-settle-allegations-concerning-impermissible-financial
  4. https://www.justice.gov/opa/pr/addiction-treatment-facilities-medical-director-sentenced-112-million-addiction-treatment