FISH Test Crackdown against 21st Century Oncology Nets Nearly $25 Million… and Counting

$24.86 million. That's how much a whistleblower has made for the government and herself—so far—in a case against 21st Century Oncology for alleged fraudulent billing of fluorescence in situ hybridization (FISH) tests. The case, which continues to unfold, is an excellent illustration of whistleblower suits against labs under current OIG medical necessity guidelines and Department of Justice enforcement policy.

The Red Flags
The case began in March 2013, when Mariela Barnes filed a qui tam lawsuit claiming that a lab owned by 21st Century billed Medicare and Tricare for medically unnecessary FISH tests. The tests were ordered by four Fort Myers-based urologists who allegedly received bonuses from the integrated cancer center based on the number of tests they ordered. Although whistleblower cases against labs are a regular occurrence, the 21st Century case was one that proved particularly attractive to the Justice Department.

The Tests in Question: FISH tests are performed on urine to detect genetic abnormalities tied to bladder cancer. Used in conjunction with rather than in lieu of standard bladder cancer diagnostic procedures, FISH tests include both technical (sample preparation and incubation) and professional (analysis) components. In addition to being relatively pricey, FISH tests are deemed medically reasonable and necessary for Medicare coverage purposes in only two limited situations:

• To monitor for tumor recurrence in patients previously diagnosed with bladder cancer; or

• Where after a full workup of a patient with hematuria, i.e., blood in the urine, the urologist has reason to suspect bladder cancer.

FISH tests had also been at the center of another high profile False Claims Act case at the time: the Bostwick Laboratories case. (See, NIR, "Bostwick Laboratories Settles Whistleblower Case for $6 Million," for more details on the case.)

The Red Flags: The 21st Century case also satisfied what at the time was the Office of Inspector General's emerging criteria for identifying questionable billing of lab tests, criteria that the OIG would later publish in August 2014 guidance, including:

• High average allowed amount per claim;

• High average number of claims per beneficiary;

• High average allowed amount per beneficiary;

• High average number of claims per ordering physician;

• High average allowed amount per ordering physician;

• High percentage of duplicate lab tests;

• High percentage of claims with compromised beneficiary numbers; and

• High percentage of claims for beneficiaries living more than 150 miles from the ordering physician.

21st Century's billing of FISH tests not only ran afoul of these criteria but actually contributed to their crystallization by OIG as indicators of abusive practices. In addition to listing the 13 criteria, the August 2014 OIG report cited actual case examples of unnamed providers whose test billing practices raised inordinately high concerns under those criteria, including:

• "A non-IL in Florida was allowed an average of $1,193 per beneficiary, 16 times the average for non-ILs. The average allowed per ordering physician for this lab was $107,700, or 24 times the overall average for non-ILs. This lab also exceeded the thresholds for the percentage of claims with a compromised beneficiary number, the percentage of claims for beneficiaries who lived more than 150 miles from the ordering physician, and the percentage of duplicate lab tests. This lab was allowed $7.8 million in 2010."

Of course, that "Florida non-IL" was later revealed to be 21st Century.

Case Chronology
And so Barnes's whistleblower suit against 21st Century proved to be the perfect case at the perfect time for the OIG and DOJ. And the case continues to unfold. Rather than risk a court battle, in January 2016, 21st Century paid $19.75 million to settle the civil charges. As the whistleblower who initiated the case, Barnes receives $3.2 million of the recovery as a share.

Following Yates Memorandum policy (See the article on the Yates Memo on page 1), the settlement released 21st Century but not the individuals responsible for the wrongdoing, opening the door to prosecutions against the four ordering urologists:

Individual Settlements by Urologists in 21st Century Oncology Case

One urologist, Dr. Steven Paletsky, has yet to settle. When and if he does, it will surely push the overall total recovery from the 21st Century case to over $25 million.