Genotox Laboratories Ltd., of Austin, Texas, has agreed to pay at least $5.9 million to resolve False Claims Act allegations that it paid volume-based commissions to third party marketers in violation of the Anti-Kickback Statute and submitted claims to federal health care programs for unnecessary drug tests. In parallel proceedings, the U.S. Attorney’s Office for the Western District of Texas and Genotox entered into an eighteen-month Deferred Prosecution Agreement to resolve a criminal investigation regarding the same conduct.
“Laboratories are prohibited from paying kickbacks to third parties to arrange for laboratory orders,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable companies that violate the rules intended to protect the integrity and resources of federal health care programs.”
The settlement announced today resolves allegations that, from 2014 to 2020, Genotox paid kickbacks to independent contractor sales representatives and marketing firms to arrange for or recommend the ordering of Genotox’s laboratory testing, in violation of the Anti-Kickback Statute. As part of the settlement, Genotox admitted and accepted responsibility for paying independent contractor marketers, whom Genotox referred to as “1099” representatives, a percentage of the revenue Genotox received from billing Medicare, the Railroad Retirement Board (RRB), and TRICARE for laboratory testing orders...
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