ANTI-KICKBACK

Despite Vigorous Denial, Molecular Lab Pays $1.8 Million to Settle Fraud Charges

Case: The feds claim that Molecular Testing Labs, a toxicology and genetics lab in Washington State, paid local labs in exchange for Medicare and Tricare referrals; it then turned what had been an Anti-Kickback Statute offense into a False Claims Act violation by billing for the tests it provided as a result of those ill-gotten referrals. While unshakably persuaded of its innocence, the lab recognized that discretion is the better part of valor and agreed to pay out up to $1.8 million to settle.

Significance: While credible, Molecular’s vigorous denial of wrongdoing is a potent reminder of the Hobson’s choice providers face when charged with fraud violations: invest a fortune in time, effort and legal fees to resist or pay a substantial settlement amount to make the situation go away. Citing the hundreds of thousands it had already wracked up, a written statement from Molecular’s chief compliance officer said that, like many health care providers do, it entered into the settlement so it could “stop spending our valuable resources on the case.

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