Carolina Lab Owners Settle Kickback, False Claims Charges for Over $6 Million
Case: At its apex, Physicians Choice Laboratory Services (PCLS) had over 450 employees in North and South Carolina. But while PCLS is now defunct, the same cannot be said of its two former owners, Douglas Smith and Philip McHugh, who have just agreed to fork over, respectively, $4.5 million and $2,021,795 to settle charges of falsely billing Medicare for millions of dollars in lab drug testing services over a two-year period between 2013 and 2015. Significance: Smith and McHugh were the kingpins in the alleged scheme under which PCLS paid physicians kickbacks in exchange for ordering tests from the lab. By subsequently billing Medicare for those services, the lab violated the False Claims Act. Smith is also one of the named defendants in a whistleblower lawsuit that a federal court in North Carolina said could go to trial in a May 2020 ruling. In December 2019, a former sales rep and lab manager for PCLS was assessed a penalty of nearly $650,000 for his role in the scheme.
Case: At its apex, Physicians Choice Laboratory Services (PCLS) had over 450 employees in North and South Carolina. But while PCLS is now defunct, the same cannot be said of its two former owners, Douglas Smith and Philip McHugh, who have just agreed to fork over, respectively, $4.5 million and $2,021,795 to settle charges of falsely billing Medicare for millions of dollars in lab drug testing services over a two-year period between 2013 and 2015.
Significance: Smith and McHugh were the kingpins in the alleged scheme under which PCLS paid physicians kickbacks in exchange for ordering tests from the lab. By subsequently billing Medicare for those services, the lab violated the False Claims Act. Smith is also one of the named defendants in a whistleblower lawsuit that a federal court in North Carolina said could go to trial in a May 2020 ruling. In December 2019, a former sales rep and lab manager for PCLS was assessed a penalty of nearly $650,000 for his role in the scheme.
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