Lab Implicated in Long-Running Kickback Case Pleads Guilty, Forfeits Assets

Amidst the guilty pleas and sentencing of dozens of individuals, the laboratory company Biodiagnostic Laboratory Services LLC (BLS) entered a guilty plea the end of June in New Jersey federal court. The company was the subject of a long-running government investigation and enforcement effort surrounding allegations of kickbacks in exchange for lab test referrals.

The company pleaded guilty to one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of conspiracy to commit money laundering, the Department of Justice (DOJ) announced. U.S. District Judge Stanley R. Chesler then sentenced the company, requiring forfeiture of all its assets (operations have already ceased).

So far, the case has led to 41 guilty pleas including 27 from physicians. The latest guilty plea came from a New Jersey physician just days after the lab entered its plea. That physician admitted to receiving “consulting fees” in exchange for referrals of patient blood specimens to the lab for testing. The DOJ has said the case is “believed to be the largest number of medical professionals ever prosecuted in a bribery case” and it has “recovered more than $12 million through forfeiture.” The government had alleged millions of dollars in bribes were paid to providers to influence test referrals to the laboratory which yielded more than $100 million for the lab in Medicare and private payor payments. One of the most recent physician sentences involved a 37-month jail sentence to a physician who had pleaded guilty to accepting bribes in violation of the Anti-Kickback Statute. Those bribes were said to include cash payments as well as meals and entertainment such as tickets to professional sporting events, Katy Perry and Justin Bieber concerts, and a Broadway show.

Takeaway: The lab at the center of purportedly the largest physician bribery case is finally sentenced.