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Diagnostic lab accused of improper dealings with TX hospitals

The government has strict regulations when it comes to relationships between hospitals and diagnostics labs. These regulations were recently highlighted when the Department of Justice (DOJ) reached a multi-million-dollar settlement with a diagnostic lab over allegations the lab improperly billed federal healthcare programs.

What was the DOJ’s claim about improper billing?

The agency stated the lab had violated the Anti-Kickback Statute (AKS) because it paid physicians kickbacks. The government reviewed the lab’s relationships with healthcare providers from 2015 through 2017. Based on this investigation, the government gathered enough evidence to establish the lab filed claims for payment with Medicare. As such, it could argue the claims fell under the regulation of the AKS.

Based on this foundation, the government stated the lab used improper financial incentives to encourage physicians to use their services in violation of the AKS. Instead of using the labs for their services because it was in the patient’s best interests, the government stated the lab’s agreement with physicians encouraged the use for financial gain. More specifically, it claimed the labs provided per-test payments to hospitals.

Ultimately, the government was able to present the lab with enough evidence to encourage a settlement. The laboratory will pay the government restitution in the amount of $27 million to settle the claims.

Is this an unusual case?

Unfortunately, not. This is just one example of the government’s crackdown on relationship between physicians and diagnostic labs. As such, diagnostic labs that find themselves under investigation or facing similar accusation are wise to act to protect their interests.