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

Family MD Faces Jail for Taking Blood Test Referral Bribes.
Case: It took the jury just four hours to find a 79-year-old New Jersey family physician guilty of all 10 counts of accepting bribes from Biodiagnostic Laboratory Services (BLS) in exchange for lab test referrals. Over a seven-year period, BLS employees and business associates paid the doctor roughly $200,000 in monthly bribe payments disguised as rental, service agreements and consulting fees, for referrals generating $3 million worth of blood testing business for the lab.

Significance: This case is a reminder that penalties for paying and taking bribes for referrals are hardly limited to anti-kickback law sanctions. Charges in this case also included conspiracy, and Federal Travel Act violations, each carrying a maximum penalty of five years in prison and $250,000 fine, as well as count of wire fraud carrying a maximum prison sentence of 20 years. (For more on the BLS case, see Labs in Court, GCA, February 2017.)

Clinic Pays Physician to Sign Off on Patients Examined by Grad Student.
Case: The 47-year-old owner of a Houston clinic was sentenced to 33 months in prison and $560,000+ in restitution payments for fraudulently billing Medicare and Medicaid for over $1 million in diagnostic tests and other medical services.

Significance: The accusations include paying a physician to sign medical records for patients she didn't see and who were actually examined by an unlicensed foreign medical graduate and billing for the services using her Medicare provider number.

Hospital Fined $32K for Workplace Violence Hazards.
Case: OSHA fined a Pennsylvania mental health hospital $32,158 for a trio of safety violations, including failing to protect nurses, medical technicians and other employees against workplace violence risks [BHC Northwest Psychiatric Hospital LLC, dba Brooke Glen Behavioral Hospital, News Release, OSHA (Reg. 3)].

Significance: Although workplace violence risks within health care facilities are all too real, OSHA fines remain relatively rare. But three things worked against the hospital in this case, including the fact that:

• An employee actually complained to OSHA, triggering the inspection;

• Mental health and psychiatric hospitals are regarded as high risk settings for workplace violence; and

• Above all, the hospital had experienced a number of previous incidents in which employees suffered serious injuries after being bitten, punched, scratched, grabbed or hit with objects hurled by patients.

(For help managing workplace violence hazards at your lab, see GCA, Oct. 28, 2016.)