On October 2, the Department of Justice (DOJ) announced that Genomic Health Inc. agreed to pay $32.5 million to resolve allegations that it violated the False Claims Act. Genomic Health Inn., headquartered in Redwood City, California, provides genomic-based clinical diagnostic tests, principally focusing on Oncotype DX, which is used for patients diagnosed with breast, colon, and prostate cancer.
The government alleges that Genomic Health Inc. created a scheme to evade Medicare’s 14-Day Rule, which regulates billing for genomic laboratory tests. The Medicare 14-Day Rule “prohibits laboratories from separately billing Medicare for covered tests if a physician ordered the test within 14 days of the patient’s discharge from a hospital stay in an inpatient or outpatient setting.”
These allegations were brought to light by a qui tam whistleblower, who filed two separate actions against Genomic Health Inc. The False Claims Act’s qui tam provisions permit private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. In this settlement, the whistleblower will be awarded approximately $5.6 million.
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