Labs In Court: A roundup of recent cases and enforcement actions involving the diagnostics industry

Owner of MD Practices Settles Fraud Charges for $3.07 Million
Case: Individual physicians implicated in frauds committed by the practices and clinics they own is this month's predominant theme. Leading off is the MD owner of a pair of medical practices in Delaware and Maryland doing business as Got-A-Doc Walk-In for alleged false billing of Medicare and Medicaid for lab services, including services: 

• Not medically necessary;
• Not performed by an eligible provider;
• Not provided at all; and
• Not properly documented.

Significance: As part of the settlement, the doctor has agreed to surrender his medical licenses. And the doctor's misery is just beginning insofar as the settlement covers only the civil charges and not his potential criminal liability stemming from the scheme.

Pain Clinic Co-Owner Pleads Guilty to Drug Testing Kickback Charges
Case: The Louisiana physician received $336,000 in kickbacks from a drug testing lab representing a percentage of the reimbursement proceeds generated via the referrals of Medicare patients' urine samples for testing over a two-year period. He'll be sentenced in March.

Significance: The other physician co-owner of Louisiana Spine & Sports LLC was indicted last year for his part in an alleged $4.4 million false billing scheme involving medically unnecessary quantitative urinalysis tests and billing for minor surgical procedures performed on days before or after patient visits.

New York Doctor Busted for Falsely Billing Medicaid for Lab Drug Tests
Case: The State claims that the physician billed for $939,000 worth of drug testing services that his lab didn't and couldn't actually provide. For example, instead of charging for a single test on a patient, he charged for 11 nonexistent tests. Other alleged offenses include performing medically unnecessary services and operating the lab without a director.

Significance: This case is typical of the current pattern of health care fraud enforcement—focus on drugs and drug testing and sweep in all related charges, in this case violating federal and state requirements that labs employ a director to oversee operations.

North Carolina Hospital Settles Self-Disclosed Kickback Claims for $2.2+ Million
Case: Rex Hospital, Inc. d/b/a UNC Rex Healthcare, agreed to shell out $2,277,762 for kickbacks violations stemming from its deal to lease a doctor from a community hospital to provide cardiology services. In addition to paying the community hospital a market-based fee for the lease, the OIG contends Rex paid kickbacks by also paying the physician's salary and bonuses for the cardiology services provided, reimbursements that should have been made by the community hospital.

Significance: The price of the settlement appears relatively high, especially when you consider that Rex self-disclosed to the OIG.

10x Genomics Ordered to Pay $23.9 Million for Infringing Bio-Rad's Patents
Case: The Federal District Court jury found that 10x willfully infringed three genetic analysis technology patents that Bio-Rad licensed from the University of Chicago on an exclusive basis. Specifically, the jury concluded that all single-cell and linked-read genomics products sold by 10x, including GemCode Long Read, Chromium Genome/Exome and Chromium Single Cell 3 willfully infringed the patented technology.

Significance: The court case is just one front in the IP war between the firms. 10x has filed a complaint with the International Trade Commission accusing Bio-Rad of illegally importing microfluidic systems violating its own patents into the US for sale. 10x also issued a statement expressing its strong disagreement with the court verdict and its intention to appeal.