There have been several enforcement cases involving labs since G2 Intelligence’s last Weekly Enforcement Report and holiday break. During the period from December 12, 2022 to Jan. 9, most cases involved the usual False Claims Act and kickback-related lab schemes as well as doctors on the hook for billing medically unnecessary tests to federal healthcare programs. One unusual case involved two biotech companies and their co-founder paying $10 million to settle allegations that they “mischarged federal grants,” according to the Northern District of California U.S. Attorney’s office.
The key cases from the period are summarized in the table below:
Healthcare-Related Enforcement Actions from December 12, 2022 to January 9, 2023
| Date Action Announced | Defendant(s) | Allegations/Charges | Result |
| December 13, 2022 | · Chiropractor Yury Gampel · 15 Modern Vascular office-based labs from across the US mainly owned by Gampel · Five Modern Vascular-affiliated companies owned by Gampel | False Claims Act (FCA) complaint filed alleging the defendants offered doctors the chance to invest in office-based labs in exchange for referrals of TRICARE and Medicare patients | Pending1 |
| December 14, 2022 | · Vijesh Patel, MD · Laju Patel (wife of Vijesh Patel and office manager) | False Claims Act allegations that they violated the Anti-Kickback Statute by referring patients for testing to three labs in SC, TX, and NJ in exchange for kickbacks | $422,789 settlement and agreement to cooperate with DOJ investigations and lawsuits related to other participants in the alleged schemes2 |
| December 14, 2022 | Minal Patel, owner of LabSolutions LLC | Participated in a Medicare fraud scheme involving the submission of more than $463 million in claims for medically unnecessary genetic and other lab tests that were also “procured through the payment of kickbacks” | Convicted of: · 1 count of conspiracy to commit healthcare fraud and wire fraud · 3 counts of healthcare fraud · 1 count of conspiracy to defraud the US and to pay and receive illegal healthcare kickbacks · 4 counts of paying illegal healthcare kickbacks · 1 count of conspiracy to commit money laundering To be sentenced March 7, 20233 |
| December 15, 2022 | Ocenture LLC and subsidiary Carelumina LLC | Allegedly paid and received kickbacks related to genetic testing samples that resulted in false claims being submitted to Medicare | $3 million settlement4 |
| December 15, 2022 | · Jasdeep Sidana, MD · Docs Medical Group, Inc. | Allegedly improperly billed Connecticut Medicaid and the federal Medicare program, as well as billed the programs for both unsupervised and medically unnecessary allergy services | $4,267,950.21 settlement5 |
| December 19, 2022 | Dominion Diagnostics | Independent clinical lab is alleged to have paid kickbacks to a New Bedford-based clinical lab in exchange for referrals of urine drug tests (UDTs). The lab is also accused of improperly billing MassHealth for medically unnecessary UDTs | $1.5 million settlement.6 |
| December 20, 2022 | BioTelemetry Inc. and subsidiary CardioNet LLC | Allegedly violated the FCA by submitting claims to federal healthcare programs for heart monitoring tests that were partly done outside the US, often by unqualified technicians | $44,875,000 settlement7 |
| December 21, 2022 | · Dr. Paul Andrew Rhodes, co-founder · iSense, LLC Specific Diagnostics, Inc. | The two biotech companies and their cofounder allegedly violated the FCA by billing federal grants for “costs incurred by another business and by billing for compensation in amounts exceeding authorized federal limits.” The defendants are also accused of “backdating services and cost-sharing agreements and knowingly presenting a backdated agreement to the United States” | Total $10,068,875 settlement, with Rhodes paying $2,068,875, Specific paying $4,000,000, and iSense paying $4,000,0008 |
| January 5, 2023 | Gastroenterologist Morris Barnard | Pled guilty in March 2022 to healthcare fraud for his role in a scheme in which he billed Medicare for $1.4 million worth of gastroenterological and colonoscopy procedures he never actually performed | Sentenced to 30 months in prison for healthcare fraud and must pay more than $1.4 million in restitution9 |
| January 6, 2023 | · John Grisham · Rob Wilburn · Richard Speights Jr. | The three owners and operators of genetic testing lab Trinity Clinical Laboratories LLC allegedly acquired thousands of Medicare recipients’ DNA samples and “corresponding prescriptions” that the lab then used to bill Medicare and Medicare Advantage for unnecessary genetic testing. The fraudulent billing led to roughly $44 million in reimbursement from Medicare | · All defendants charged with 1 count of conspiracy to defraud the US and to pay and receive kickbacks and bribes · Wilburn and Grisham charged with 6 counts of paying and receiving healthcare kickbacks and bribes · Speights Jr. charged with 2 counts of paying and receiving healthcare kickbacks and bribes10 |
| January 9, 2023 | · Aarti D. Pandya, MD · Aarti D. Pandya, M.D. P.C. (Pandya Practice Group) | Allegedly violated the FCA by billing the government for medically unnecessary cataract surgeries and diagnostic tests as well as for “incomplete” or “worthless” tests and office visits that didn’t “provide the level of service claimed” | $1,850,000 settlement.11 |
For more information on these cases and the lessons labs can learn from them, see the Labs in Court and Enforcement Scorecard sections in G2’s Lab Compliance Advisor. Sign in to your LCA subscription, or sign up for a free LCA trial to gain access.
References:
- https://www.justice.gov/opa/pr/united-states-files-false-claims-act-complaint-against-chiropractor-modern-vascular-office
- https://www.justice.gov/opa/pr/physician-and-office-manager-agree-pay-over-420000-settle-kickback-allegations-involving-ne-1
- https://www.justice.gov/opa/pr/lab-owner-convicted-463-million-genetic-testing-scheme-defraud-medicare
- https://www.justice.gov/opa/pr/ocenture-llc-and-carelumina-llc-settle-allegations-false-claims-unnecessary-genetic-testing
- https://www.justice.gov/usao-ct/pr/connecticut-physician-and-urgent-care-practice-pay-over-42-million-settle-false-claims
- https://www.mass.gov/news/clinical-laboratory-will-pay-15-million-to-resolve-medicaid-kickback-and-false-claims-allegations
- https://www.justice.gov/opa/pr/cardiac-monitoring-companies-pay-more-448-million-resolve-false-claims-act-liability-relating
- https://www.justice.gov/usao-ndca/pr/two-biotech-firms-and-their-co-founder-pay-10-million-resolve-allegations-mischarging
- https://www.justice.gov/usao-edny/pr/long-island-medical-doctor-sentenced-30-months-prison-medicare-billing-fraud-scheme
- https://www.justice.gov/opa/pr/laboratory-owners-and-executives-charged-health-care-kickback-scheme
- https://www.justice.gov/usao-ndga/pr/conyers-doctor-pays-1850000-resolve-allegations-she-performed-and-billed-medically