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  4.  → DOJ goes after lab execs and employees for FCA violations: 3 things to know

DOJ goes after lab execs and employees for FCA violations: 3 things to know

The feds have continued their crackdown on misuse of federal funds. A recent case provides an example of how the United States Department of Justice (DOJ) handles a situation with a focus specifically on diagnostic laboratories. The government claims the lab in this case violated the False Claims Act (FCA) when it offered kickbacks to physicians for use of their lab’s services. The prosecution argues the labs would pay physicians a set fee in exchange for each referral for toxicology and blood testing services.

Ultimately, the government argues the arrangement was illegal for two reasons: it constituted an agreement with illegal kickbacks and led to medically unnecessary testing.

So what should labs and medical professionals do with this information? It is important to stay up to date with how the government is handling these types of claims. Three big lessons to learn from this case include the following:

#1: The feds will likely investigate referral fees

Physicians and diagnostic labs are wise to carefully review any arrangement that includes a payment connected to a referral for medical services or use of their lab services. The feds are cracking down on these arrangements and, even if used for legit purposes, the government has found success building cases to claim the arrangement is motivated by financial greed instead of patient need.

#2: This is just one of the legal tools the feds can use to build this type of case

The FCA is one legal tool, the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) another. Lawmakers enacted EKRA more recently than the FCA and we are still learning how the government plans to use it in these types of cases.

So far, we know that it is an option when the feds believe a lab has paid a provider with any form of remuneration in exchange for use of their lab. There are some exceptions that can apply. A lab that has an arrangement with healthcare providers is wise to conduct an audit to make sure their practices comply with this relatively new law.

#3: These cases come with serious penalties

A slap on the wrist and financial penalty is just the start. A conviction for a violation of the FCA or EKRA can come with imprisonment. As such, it is important to take these allegations seriously and start building a defense once aware of an investigation or impending charges.

Attorney John Rivas is responsible for this communication