Earlier this fall, the Department of Justice (DOJ) accused a genetic testing company of health care fraud. The DOJ essentially accused the lab of violating the federal False Claims Act, discussed in more detail in a previous post available here. Instead of fighting the allegations, the lab has chosen to move forward with a settlement agreement.
Why chose a settlement agreement instead of fighting allegations of wrongdoing?
The best legal strategy will vary depending on the details of the case. However, two primary reasons to consider a settlement include:
- Cost. Fighting a legal battle can be a long and expensive matter. The process can involve a lengthy discovery period used to gather evidence, potentially including expert testimony, and multiple court dates. This can make it difficult to move on with business.
- Evidence. After the discovery period begins, it may become apparent the government has a strong case. In these situations, it may be less risky to negotiate a settlement than to make a case in court.
A settlement generally involves compromises on the part of both parties involved in the case. Getting a fair settlement is not an easy process. As a result, it is wise to have legal counsel to advocate for your interests during negotiations and discuss the implications of any potential settlement.
What was the settlement in this case?
The lab will pay the government $42.6 million and has also agreed to be excluded from federal health care programs for 25 years.
Is this the end of the government’s case against the genetic labs?
No. Business leaders within the organization continue to face criminal charges. One faces criminal charges for conspiracy to commit health care fraud, soliciting and receiving monetary kickbacks and possession and sale of controlled substances. If the government can build a successful case, he could face up to 500 years imprisonment.