NIPT Lab Company Pays $49 Million to Settle False Billing and Kickback Charges

Case: A month after going public, Progenity agreed to shell out $49 million to settle claims of overbilling and paying physicians kickbacks to order its noninvasive prenatal tests (NIPT). The case, which began as a whistleblower lawsuit, contends that the San Diego biotechnology knew the test performed wasn’t FDA approved, and thus not covered by TRICARE; as a result “it falsely and fraudulently used a medical billing code that TRICARE did cover.” The settlement also resolves claims of falsely billing Medicaid for NIPT with state attorneys general getting $13.2 million of the sum.

Significance: In addition to deliberately using a false billing code, prosecutors accused Progenity of kickback violations, including:

• Paying physicians excessive “draw fees” above fair market value for collecting blood specimens for the NIPT tests;
• Providing meals and happy hours disguised as educational sessions for physicians and their staff; and
• Improperly waiving or reducing patient coinsurance and deductible payments.