Enforcement Trends — Labs Continue to Be a Focus
Laboratories continue to draw attention from the Department of Justice (DOJ) and the Office of Inspector General (OIG) as 2014 came to a close. In December, the DOJ announced two guilty pleas and one sentencing in cases involving clinical laboratories. Another Biodiagnostic-Related Physician Sentencing In a case highlighted in the OIG’s December podcast, a New […]
Laboratories continue to draw attention from the Department of Justice (DOJ) and the Office of Inspector General (OIG) as 2014 came to a close. In December, the DOJ announced two guilty pleas and one sentencing in cases involving clinical laboratories. Another Biodiagnostic-Related Physician Sentencing In a case highlighted in the OIG's December podcast, a New York pediatrician, Demetrios Gabriel, was sentenced to 37 months in prison, one year supervised release and a $75,000 fine, announced U.S. Attorney Paul J. Fishman. Gabriel had pleaded guilty to accepting bribes for referring patient blood specimens to Biodiagnostic Laboratory Services LLC (BLS), a Parsippany, N.J.-based laboratory. The U.S. Attorney's release notes that 33 people - including 22 doctors - have pleaded guilty in connection with the BLS bribery scheme which involved millions of dollars in bribes and brought BLS over $100 million in payments from Medicare and other payers. Gabriel admitted to receiving monthly payments exceeding $4,500, including a $3,000 monthly cash fee, additional payments based on the volume of samples referred to BLS, and $1,500 paid monthly to a restaurant he owns. So far, the investigation has yielded more than $10.3 million in forfeiture, the U.S. Attorney's Office reports. Executives Under Scrutiny As Well It's not just physicians coming under fire but also executives. A chief financial officer for Maryland pain management clinics, Vic Wadhwa, pleaded guilty to receiving kickbacks exceeding $450,000 for referring urine specimens to a New Jersey laboratory, U.S. Attorney Rod J. Rosenstein and OIG and FBI agents announced. The lab is alleged to have paid the clinics more than $1 million in kickbacks over the course of 12 months relating to this referral arrangement. The statement announcing the plea explained that the CFO had negotiated the referral arrangement which promised the clinic half of the laboratory's profit after expenses for urine samples the clinics submitted for testing. In another case, an owner of a New Jersey diagnostic testing facility, Vijay Patel, pleaded guilty to submitting Medicare claims for diagnostic testing services that a cardiologist had performed, according to an announcement by U.S. Attorney Paul J. Fishman. The U.S. Attorney explained the cardiologist performing the services was subject to pre-payment review and avoided such review when Patel submitted the claims as if the diagnostic testing facility had performed the services; Patel kept part of the payment received and remitted the rest to the cardiologist. Safe Harbor and Fraud Alert Recommendations Sought In other anti-kickback news, the OIG has issued its annual notice seeking suggestions for Special Fraud Alert topics and new anti-kickback safe harbors and modifications to existing safe harbors. Any recommendations or comments must be submitted by March 2, 2015. The opportunity for public input on these safe harbors is a response to concerns that the language of the anti-kickback law is so broad that it can capture "innocuous commercial arrangements" resulting in criminal prosecution or administrative sanctions for those involved. The Health Insurance Portability and Accountability Act of 1996 requires the OIG annually solicit these proposals. Factors the OIG considers when evaluating such proposals include access to and quality of health care services, cost to federal programs, competition among providers and patient freedom of choice, potential for overutilization of services and provision of services to underserved areas and populations.