In an update to a lab fraud complaint brought forth by the Department of Justice (DOJ) in May 2022, the department announced on June 28 that 15 additional doctors have settled kickback allegations relating to the supposed scheme, agreeing to pay a total of $2.83 million.
According to the DOJ, the Texas doctors were alleged to have been paid thousands of dollars from nine management service organizations (MSOs) in exchange for ordering lab tests from three different organizations, thus violating the Anti-Kickback Statute and Stark Law. The three organizations include Rockdale Hospital dba Little River Healthcare, True Health Diagnostics LLC, and/or Boston Heart Diagnostics Corporation, with Little River allegedly making the payments to the doctors via independent contractor recruiters, who then used the MSOs to pay doctors, disguising those payments as investment returns.
In addition to the settlement, the 15 doctors will also cooperate with the DOJ’s investigation of others involved in the alleged scheme, which includes 18 other doctors who have also paid settlements relating to the allegations, the department said in a statement.1
Other notable enforcement actions announced over the past two weeks by the DOJ that involve the healthcare industry include:
June 28: Missouri state representative Patricia “Tricia” Ashton Derges was found guilty of several charges relating to an almost $900,000 COVID-19 fraud scheme and a separate $200,000 fraud relating to a fake stem cell treatment marketed through her Missouri clinics, as well as illegally distributing prescription drugs to patients of those clinics. In relation to the COVID-19 scheme, Derges tried to get her hands on funding through the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act for COVID-19 testing that had already been paid for by one of her for-profit clinics.2
June 29: Skilled nursing facility Plaza Rehab Center and Citadel Consulting Group LLC d/b/a Citadel Care Centers LLC have agreed to pay $7.85 million to resolve allegations that Plaza, at Citadel’s direction, fraudulently switched the type of Medicare coverage residents were enrolled in, without their consent or knowledge, in order to boost the facility’s revenues.3
June 30: In another COVID-19 fraud-related case, MorseLife Health System Inc. agreed to pay $1.75 million to settle False Claims Act allegations that it had facilitated COVID-19 vaccinations through the Centers for Disease Control and Prevention’s Pharmacy Partnership for Long-Term Care Program to hundreds of people ineligible to participate in the program. The program was meant to ensure that only those most at risk for COVID-19 received vaccines when the shots were in short supply.4