ENFORCEMENT

Labs In Court: A roundup of recent cases and enforcement actions involving the diagnostics industry

Free Point of Care Test Cups Results in $64K Kickback Settlement Bill

Case:The embers from the Millennium Laboratories case, which settled in 2015, continue to smolder. The latest collateral defendant is Parallax Center, a New York City drug addiction treatment center which has agreed to pay the OIG $64,203 to settle kickback-related charges.

Significance:For lab managers, the takeaway from this case is what got Parallax into trouble, namely, providing Millennium, free point of care test cups. The OIG has made it abundantly clear that compensation need not be elaborate to cross the line; something as seemingly trivial as free cups may have enough value to establish an illegal relationship between the lab and referral source. And if the referrals are tainted, billing for the resulting claims amounts to submitting a false claim under the False Claims Act.

Judgment Day for BLS Bribery Strip Club Doctors

Case:Among the three dozen doctors that have so far been convicted for taking bribes from now defunct Parsippany, NJ, Biodiagnostic Laboratory Services LLC (BLS), the Staten Island brothers treated to lap dances at strip clubs may be the most notorious. Now they and one other physician have received their sentences:

Name Practice Allegations Sentence
George
Roussis
Pediatrician,
Staten Island, NY
Accepted $175K in BLS cash payments for roughly $1.7 million in lab referrals from Oct. 2010-April 2013; BLS also paid for strip club trips, lap dances and sexual favors 37 months’ prison, one year supervised release + $7,500 fine
Nicholas
Roussis
OBGYN
Staten Island, NY
Accepted $175K in BLS cash payments for roughly $1.7 million in lab referrals from Oct. 2010-April 2013; BLS also paid for strip club trips, lap dances and sexual favors 24 months’ prison, one year supervised release + $5,000 fine
Ricky J.
Sayegh
Internal medicine,
Yonkers, NY
Accepted roughly $400K in cash bribes for generating roughly $1.4 million in lab business from Feb. 2010-April 2013 30 months’ prison, one year supervised release + $10,000 fine
Yousef
Zibdie
Internal medicine,
Woodland, NJ
Accepted $80K worth of monthly bribe checks for generating roughly $930K in illegal lab business for BLS

Significance:The latest BLS scoresheet: 50 convictions, 36 of them doctors and over $13 million recovered via forfeiture. At least two more doctors are also awaiting sentencing. Stay tuned…

Clinic Owner Must Pay Back $1.1 Million in Unnecessary Services

Case: The owner-operator of a Burbank medical clinic was sentenced to 37 months in prison after pleading guilty to two counts of falsely billing Medicare for medically unnecessary office visits and diagnostic tests. The owner admitted that "many, if not all" of the people who came to her clinic were lured by promises of free equipment, services or food offered by her "marketer" co-schemers.

Significance: One of the distinctions of this otherwise rather ordinary case is that the clinic owner also agreed to make restitution payments of $1.711 million to cover what CMS paid out to reimburse the clinic for the medically unnecessary services involved in the scheme.

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