Home 5 News 5 Texas Lab Settles Kickback Allegations for $5.9M

Texas Lab Settles Kickback Allegations for $5.9M

by | Apr 5, 2023 | News, Open Content

Last week saw three key settlements, including a lab accused of paying kickbacks for test referrals and billing for unnecessary drug tests.

Settlements feature prominently in this week’s enforcement report. In key healthcare-related actions announced over the last week, a Texas lab settled kickback allegations for $5.9 million, while a diabetes blood test distributor settled False Claims Act (FCA) allegations for $195,000. In a third key settlement, a Michigan-based hospital system and two doctors forked over more than $69 million to settle FCA allegations involving “improper financial relationships.”

Key Healthcare-Related Enforcement Actions Announced from March 29 – April 5, 2023

Date Action AnnouncedDefendant(s)Allegations/Charges/ConvictionsResult
March 29·      Covenant Healthcare System
·       Dr. Mark Adams
·       Dr. Asim Yunus
The Michigan-based regional health system was accused of violating the FCA by having “improper financial relationships” with a physician-owned investment group and eight referring physicians, including Adams and Yunus, which allegedly resulted in false claims being submitted to FECA, TRICARE, Medicaid, and Medicare. The two doctors were accused in two separate but related civil cases of violating the FCA through these improper relationships.·       Covenant settled for $69 million
·       Adams settled for $406,551.15
·       Yunus settled for $345,987.541
March 30GlycoMark, Inc.The joint-venture subsidiary, which is owned by Toyota Tsusho Corporation, Toyota Tsusho America, Inc., and Nippon Kayaku Co., Ltd., allegedly encouraged its clients to submit claims for the GlycoMark diabetes blood test it disributed, even though the test no longer qualified for Medicaid or Medicare reimbursement as of October 17, 2016 and the company was aware of this fact.Settled alleged FCA violations for $195,000.2
April 4Genotox Laboratories Ltd.Austin, Texas-based lab is alleged to have violated the FCA by paying commissions to third-party marketers based on the number of referrals they generated for the lab. The lab is also accused of billing federal healthcare programs for unnecessary drug tests.·       Settled for $5.9 million
·       Entered an 18-month Deferred Prosecution Agreement with the U.S. Attorney’s Office for the Western District of Texas to settle a separate criminal investigation into the same conduct
·       Entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General3
Source: U.S. Attorney’s Office for the Eastern District of Michigan, U.S. Attorney’s Office for the Eastern District of Pennsylvania and U.S. Department of Justice.1-3


  1. https://www.justice.gov/usao-edmi/pr/covenant-healthcare-system-and-physicians-pay-over-69-million-resolve-false-claims-act
  2. https://www.justice.gov/usao-edpa/pr/diabetes-blood-test-distributor-glycomark-agrees-pay-195000-settle-false-claims-act
  3. https://www.justice.gov/opa/pr/texas-laboratory-agrees-pay-59-million-settle-allegations-kickbacks-third-party-marketers-and