Laboratory referral kickbacks at heart of $24.5 million settlement and Indian TV sting op

DOJ

US lab kickback settlement

Alabama-based Infirmary Health System (IHS), Infirmary Medical Clinics (IMC), Diagnostic Physicians Group P.C. (DPG) and two clinics run by IMC have agreed to pay $24.5 million to settle allegations they violated the Stark Law and Anti-Kickback Statute by engaging in a scheme to compensate physicians for laboratory and radiology referrals.

Dr. Christian Heesch, a physician formerly employed by DPG, filed the whistleblower suit in 2011, and the federal government elected to intervene in July 2013.

The government alleged IHS, through its subsidiaries and clinics, paid physician-owned DPG “a percentage of collections on items and services performed or referred by DPG physicians” to IHS-affiliated clinics that performed clinical laboratory and diagnostic imaging tests from 2005 to 2011.  DPG then compensated individual physicians for their referrals.

The government stated IHS did this so as to:

…keep DPG and its physicians affiliated with [IHS], to prevent them from affiliating with competitors, and to induce DPG physicians to refer federal health care business to IHS subsidiaries…in violation of the Anti-Kickback Statute and the FCA.

According to a 2013 article from AL.com, it was also alleged federal health programs paid at least $521.6 million in false claims between 2004 and 2010, and physicians at DPG received more than $18.6 million in bonuses during the same time frame.

DPG deliberated its compliance with the Stark Law beginning as early as 2002, and again in 2007 and 2008, according to court records.  In June 2010, a meeting took place in which DPG’s attorney told both DPG executives and IMC employees their arrangement likely violated the Stark Law, but despite this, no changes were made.

Dr. Heesch will receive $4.41 million of the settlement.

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HHS seeks to dismiss suit filed by California Clinical Laboratory Association

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Pathology Blawg News Roundup for July 18, 2014

ARUP Labs opposes release of draft FDA regulations for laboratory-developed tests Last week I talked about the letter five US senators wrote to the White House asking it to compel the Office of Management and Budget (OMB) to release draft guidance prepared by the Food and Drug Administration (FDA) on the regulation of laboratory-developed tests (LDTs). In that article I discussed how Dr. Edward Ashwood, president and CEO of ARUP Laboratories, indicated his opposition to FDA regulation of … [Continue reading]

OIG identifies questionable clinical laboratory billing in new study

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CMS releases 2015 Proposed Physician Fee and Clinical Laboratory Fee Schedules

LCD summary table

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Pathology Blawg News Roundup for July 11, 2014

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Senators push White House to release FDA laboratory-developed test regulations

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Franey Medical Laboratories not guilty of Medicaid fraud and kickbacks

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LabCorp and UnitedHealthcare to introduce BeaconLBS in Florida

BeaconLBS

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OIG Issues Special Fraud Alert on Specimen Processing and Registry Arrangements

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LabCorp wrests upstate NY VA contract away from Quest Diagnostics

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Health Care Development Services report on projected pathologist shortage

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AACC highlights significant concerns with CLFS reimbursement plan

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Jury orders Millennium Laboratories to pay Ameritox $14.8 million

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Update on American Medical Association Code of Ethics changes

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