On April 4, 2022, the United States Department of Justice announced that it filed a complaint against several individuals and entities – including two laboratory CEOs and one hospital CEO – alleging False Claims Act violations. According to the complaint, the parties engaged in patient referrals in violation of the Anti-Kickback Statute and the Stark Law and submitted claims improperly billed to federal healthcare programs for laboratory testing.
Background
According to the DOJ, from at least 2010 to 2014, laboratory executives and employees at Health Diagnostics Laboratory, Inc. (“HDL”) and its successor True Health Diagnostics, LLC (“THD”) as well as Boston Heart Diagnostics Corporation (“BHD”) allegedly conspired with small hospitals throughout the state of Texas, including Rockdale Hospital (d/b/a Little River Healthcare) (“LRH”), to pay doctors to make referrals to the hospitals for laboratory testing. The laboratory testing was then performed by BHD or THD.
According to the complaint, laboratories competed to offer the highest processing and handling fees to providers, with HDL paying the highest at $20 per referral. In April 2015, DOJ intervened in a False Claims Act suit alleging that HDL and three executives had offered and paid kickbacks for laboratory referrals. HDL settled for $47 million and each of the three executives were found liable for over $111 million in a judgment affirmed in all respects by the Fourth Circuit, with certiorari denied by the Supreme...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...