By Kelly A. Briganti, Editorial Director, G2 Intelligence
Laboratory services are at the center of another False Claims Act settlement—this time in an arrangement involving a dermatology practice and its dermatopathology laboratory. A Georgia-based dermatology practice agreed to pay $3.2 million to settle allegations of Stark Law and False Claims Act violations relating to financial relationships between the entity and its physicians. The government claimed the dermatology practice required independent contractor physicians working at its practices to use its in-house pathology laboratory for pathology services and that financial relationships with those physicians violated the Stark law. Thus, the government claimed the practice “improperly billed Medicare for dermatopathology analyses performed … on specimens that were sent to the laboratory” by the independent contractor physicians.
“Health care companies that make sweetheart deals with physicians to boost profits undercut both the financial integrity of Medicare and the public’s trust in the medical profession,” declared Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services’ Office of Inspector General, in the Department of Justice press release announcing the settlement. That press release does not elaborate on the facts underlying the alleged “sweetheart deals.” The settlement arose out of three whistleblower lawsuits filed under the False Claims Act. The DOJ’s press release reports the whistleblowers will collectively receive more than $584,000.
This settlement follows closely on the heels of two other major settlements also arising out of False Claims Act whistleblower lawsuits—relating to laboratory referrals and alleged violations of the Anti-kickback statute rather than the Stark law.
Health Diagnostic Laboratory, Inc. (HDL) and Singulex, Inc. agreed to pay $47 million and $1.5 million respectively to settle allegations they induced referrals of specimens for blood testing by paying processing and handling fees. The April issue of G2 Compliance Advisor addresses the HDL and Singulex settlements and provides tips for avoiding liability with regard to relationships with referral sources.