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Weekly Enforcement Report: Big Settlements but Lab Cases Scarce

by | Jun 7, 2023 | News, Open Content

While the last few weeks haven’t seen many lab-related enforcement actions, several healthcare companies had to pay big.

Enforcement actions related to laboratories and lab testing have been scarce over the past few weeks. Though several key actions involving healthcare companies and physicians have been announced since our last Weekly Enforcement Report, only one case directly related to lab testing. In that case, a doctor and his pain management clinic settled False Claims Act (FCA) allegations, which partly involved medically unnecessary urine drug screening tests (UDTs), for $625,000.1

Other key cases involved the sentencing of a doctor for stealing roughly $250,000 from COVID-19 relief programs2 and three healthcare companies paying more than $29 million to settle FCA-related allegations.3

Key Healthcare-Related Enforcement Actions Announced from May 17, 2023 – June 7, 2023

Date Action AnnouncedDefendant(s)Allegations/Charges/ConvictionsResult
May 24, 2023·       Massachusetts Eye and Ear Infirmary
·       Massachusetts Eye and Ear Associates, Inc.
·       Foundation of the Massachusetts Eye and Ear Infirmary, Inc.
The three defendants, collectively known as Massachusetts Eye and Ear, allegedly compensated 44 referring physicians in a way that violated the Physician Self-Referral Law (Stark Law). The owner and operator of Massachusetts Eye and Ear, Mass General Brigham, informed the government of the issues while the government was investigating related allegations.Settled allegations for more than $5.7 million.4
May 25, 2023·       Kaleida Health (Kaleida)
·       Olean General Hospital (OGH), New York
Accused of violating the Civil Monetary Penalties Law by paying employees and their family members who were also federal healthcare program beneficiaries in the form of discounts for various healthcare services. Kaleida and OGH self-disclosed the alleged conduct to the OIG.Settled allegations for $2,702,944.61.5
May 25, 2023·       Complete Physician Services
·       Kenneth Wiseman, DO
·       Steven Schmidt, DO
Collectively referred to as “CPS,” the three defendants allegedly violated the FCA by causing the submission of claims to Medicare Advantage for diagnoses that were not medically supported or not supported by proper medical documentation, in order to increase their reimbursements. The diagnoses related to morbid obesity and chronic obstructive pulmonary disease.Settled allegations for $1,500,000 plus interest.6
May 30, 2023·       James Ellner, MD      
·       Georgia Pain Management, P.C.
·       Samson Pain Center, P.C.
Doctor, his Georgia-based pain management practice, and ambulatory surgical center are accused of violating the FCA by billing TRICARE and Medicare for medically unnecessary UDTs, as well as for evaluation and management services that did not qualify for reimbursement. Ellner and his practice are further accused of violating the Anti-Kickback Statute (AKS) by accepting payment of an employee’s salary in exchange for Ellner’s referral of unnecessary UDTs to a reference lab. The allegations were brought in a qui tam lawsuit.Settled allegations for $625,000.1
May 31, 2023·       VHS of Michigan Inc. (doing business as, The Detroit Medical Center Inc. [DMC]
·       Vanguard Health Systems Inc. (Vanguard)
·       Tenet Healthcare Corporation (Tenet)
Three defendants allegedly violated the FCA by paying kickbacks to certain referring physicians, also in violation of the AKS, thus causing the submission of false claims to Medicare. Two of the hospitals DMC operates allegedly provided the services of DMC practitioners to 13 doctors at below fair market value or no cost, based on the doctors’ high number of referrals to the hospitals, in order to encourage further referrals to DMC facilities. The claims were brought in a qui tam whistleblower lawsuit by a former employee of a medical school affiliated with DMC.Settled allegations for $29,744,065.3
June 1, 2023·       Dr. Francis F. JosephThe supervisory physician of a Colorado-based medical clinic was convicted of stealing about $250,000 from both the Accelerated and Advance Payment Program and the Paycheck Protection Program and then using the money for his own personal expenses.Sentenced to two and a half years in prison.2
Source: U.S. Attorney’s Offices of the District of Massachusetts, Eastern District of Pennsylvania, and Northern District of Georgia and the U.S. Department of Health and Human Services Office of Inspector General (OIG) and U.S. Department of Justice.1-6


  1. https://www.justice.gov/usao-ndga/pr/woodstock-pain-management-doctor-and-clinics-pay-625000-resolve-false-claims-act
  2. https://www.justice.gov/opa/pr/physician-sentenced-stealing-approximately-250k-covid-19-relief-programs
  3. https://www.justice.gov/opa/pr/detroit-medical-center-vanguard-health-systems-and-tenet-healthcare-corporation-agree-pay
  4. https://www.justice.gov/usao-ma/pr/massachusetts-eye-and-ear-agrees-pay-over-57-million-resolve-false-claims-act
  5. https://oig.hhs.gov/fraud/enforcement/kaleida-health-and-olean-general-hospital-agreed-to-pay-27-million-for-allegedly-violating-the-civil-monetary-penalties-law-by-paying-remuneration-to-employees-and-family-members-who-were-federal-health-care-program-beneficiaries/
  6. https://www.justice.gov/usao-edpa/pr/primary-care-physicians-pay-15-million-resolve-false-claims-act-liability-submitting