Florida Laboratory Agrees to Pay over $1.1 Million to Settle Kickback Allegations

NEWARK, N.J. – A clinical laboratory located in Orlando, Florida, has agreed to pay more than $1.1 million to resolve kickback allegations, U.S. Attorney Philip R. Sellinger for the District of New Jersey and Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, announced today.

Genesis Reference Laboratories LLC (Genesis) has agreed to pay $1,195,845.82 to resolve False Claims Act allegations that its marketers paid illegal kickbacks to health care providers in violation of the Anti-Kickback Statute to induce the providers’ laboratory testing referrals. Genesis has agreed to cooperate with the Department of Justice’s investigations of, and litigation against, other participants in the alleged scheme.

“The payment of kickbacks by laboratories or their representatives to induce laboratory test orders undermines the integrity of federal healthcare programs,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said. “We will pursue those who offer or receive kickbacks for patient referrals regardless of how those unlawful inducements are characterized or provided.”

“Certain violations of the Anti-Kickback Statute can induce medically unnecessary testing and influence physicians’ decision-making inappropriately,” Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General said. “Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement announced today resolves allegations that from 2019 to 2021, Genesis paid marketing companies Corum Group LLC, Provisional Medical Consultants LLC, and RMC Medical LLC to arrange for and recommend that health care providers in Missouri and Texas order Genesis’ laboratory tests, and the marketing companies kicked back a portion of those payments to referring health care providers, in violation of the Anti-Kickback Statute. The health care providers allegedly were paid using purported management services organizations (MSOs), which attempted to disguise the kickbacks as investment returns but actually offered the payments to health care providers to induce laboratory testing referrals to Genesis. The settlement resolves allegations that, despite knowing of the MSO kickbacks to health care providers and receiving those providers’ subsequent patient referrals, Genesis nevertheless submitted to Medicare the claims for laboratory testing ordered by those providers, in violation of the False Claims Act.

The settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG.

The government is represented by Assistant U.S. Attorney Kruti Dharia of the U.S. Attorney’s Office, District of New Jersey, Opioid Abuse Prevention and Enforcement Unit, and Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section).

The government’s pursuit of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.