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Lab agrees to pay $12 million to settle AKS claim

A diagnostic laboratory recently agreed to pay the government almost $12 million to settle claims that the health care company violated federal Anti-Kickback Statute (AKS) regulations. The government claimed that individuals within the diagnostic lab were illegally bribing health care professionals to use the professional services offered within their lab.

The investigation began after a former employee moved forward with a qui tam lawsuit. If successful, these cases, also known as whistleblower cases, result in financial gain for the individual that begins the case. In this situation, the whistleblower that brought the case forward will likely receive approximately 20% of the settlement.

As the case progressed, government officials chose to move forward with two allegations of wrongdoing:

#1: Illegal Kickbacks

The prosecution argued the lab ultimately paid millions of dollars in illegal kickbacks to encourage physicians and other medical professionals to use their lab’s urine drug testing services instead of other labs in the area.

#2: Medically unnecessary testing

The government further argued that many of the tests ordered by these medical professionals were not necessary. As a result, the government stated the accused received Medicare and Medicaid payments purely for financial gain – they state there was no benefit to the patient.

This settlement is just the beginning. The lab has agreed to enter a compliance agreement with the government. As a result, it will continue operations under the watchful eye of the Office of the Inspector General (OIG). The settlement also requires the group to obtain the services of an independent organization to review the lab’s practices on a regular basis. Three executives from the lab are also facing criminal charges. Their case is set to move forward in 2021.

As noted above, those who work within health care businesses are strongly motivated to report any potential wrongdoing. If a disgruntled employee has any evidence to support claims other violation, they stand to gain a great financial reward. As a result, it is important that leaders within health care businesses take the time to review their business practices to better ensure they are in line with regulations.