Lab Company Owners Indicted for False Billing

Case: A north Texas federal grand jury indicted 10 people for a $300 million Medicare fraud scheme, including two physicians and the founders of three lab companies, including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC. The indictment accuses the defendants of paying kickbacks to physicians in exchange for orders of medically unnecessary tests which they subsequently billed to Medicare. If convicted, the defendants face 55 or more years in prison. Significance: The government claims the lab owners disguised the kickbacks as legitimate business transactions by using marketing firms to pay the doctors fees for medical advisory services that were never performed, as well as portions of the doctors’ staff salaries and office lease rentals, both of which were contingent on the number of lab tests referred each month. They even made direct payments to the spouse of one of the doctors, the indictment alleges. To generate even more kickback traffic, they converted one of the labs into a physician-owned lab and offered the doctors ownership interests, but only if they referred an adequate number of tests.