Magnolia Diagnostics and its owners allegedly billed Medicare for unnecessary respiratory panels performed on seniors during the pandemic, according to the US Justice Dept.

1. Unnecessary Testing Mandates: Magnolia Diagnostics and its owners allegedly required senior living communities to accept expensive respiratory pathogen panels alongside COVID-19 tests to generate significant revenue.
2. Falsified Authorizations: The laboratory reportedly used pre-populated requisition forms and altered provider signatures to perform respiratory testing without individualized clinical assessments or proper authorization.
3. Delayed Diagnostic Results: Thousands of specimens were allegedly frozen for weeks or months before processing, producing results too late to inform isolation or infection-control decisions for vulnerable seniors.

Magnolia Diagnostics, a Dallas-based clinical laboratory, and its owners, John Bains and Kelly Bains, have agreed to pay the US $19.2 million to resolve allegations that they violated the False Claims Act, according to the Department of Justice (DOJ).

The settlement addresses claims that the laboratory billed Medicare for medically unnecessary respiratory pathogen panel (RPP) testing performed on seniors receiving COVID-19 tests. Magnolia investors will pay an additional $4.8 million to resolve common law claims for unjust enrichment, payment by mistake, and claims under the Federal Debt Collection Procedures Act, according to the DOJ news release.

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