Government Secures $114.5M In False Claims Act Recoveries From Cancer Genetic Testing Kickback Scheme
By the 91pornWhistleblower Team
Last Thursday (July 17), the Department of Justice (DOJ) announced the final False Claims Act recovery in a cancer genetic testing kickback scheme involving the Medicaid programs of Colorado, Georgia, and South Carolina.听1听 Kevin Murdock, former owner and CEO of the now-defunct testing lab Premier Medical, agreed to a consent judgment of roughly $27.5 million.
Defendants Allegedly Duped Medicaid Beneficiaries Into Medically Unnecessary Cancer Screenings
According to the Government, Murdock, Premier Medical, and Premier Medical鈥檚 VP of compliance Michael Conroy, paid illegal kickbacks to Freedom Medical Labs, Robert Richardson, and Edward Burch for referrals for expensive cancer genetic (CGX) testing. 听The Premier Defendants targeted Medicaid beneficiaries in Colorado, Georgia, and South Carolina because of their favorable reimbursement for this kind of genetic testing, with amounts up to $12,000 per test.
The Government alleged the Freedom defendants set up tables at bus stops, dollar stores, street corners and other public spaces in low-income areas to attract Medicaid beneficiaries.听 They paid $20 to passers-by with a Medicaid card for DNA samples, claiming they were screening for cancer.听 They then paid a telemedicine company — with no treating relationship with these individuals — for physician orders for CGX testing. 听Most patients never even received the results of the testing.
Defendants Pay Out $114.5M For Alleged False Claims Act and Anti-Kickback Violations
The Government found two key problems with this arrangement under the False Claims Act.听 First, the testing was medically unnecessary because it was not the result of a valid test ordered by a patient鈥檚 treating provider. 听Second, the patient samples and testing orders were obtained through illegal kickbacks, violating both the Anti-Kickback Statute and False Claims Act.
The settlement came the day before the start of Murdock鈥檚 two-week trial and with his apparent acknowledgment he likely was going to lose.听 This adds to the $87 million in recoveries the Government secured from other participants in the scheme — $71 million from Premier Medical, $8 million from Richardson and Freedom Medical, and $8 million from Burch — bringing the Government鈥檚 total recovery to roughly $114.5 million.
Healthcare Kickbacks Remain A Top Enforcement Priority
The settlement is just the latest in a steady stream of DOJ settlements for violations of the Anti-Kickback Statute, the strict enforcement of which remains a top Government priority. 听The Government underscored this priority in announcing this latest settlement: 鈥淭he scheme perpetuated by the defendants in this case was fueled by greed and kickbacks, which have no place in health care.听 We will continue to invest all available resources . . . to protect our health care system and to hold accountable those who engage in this type of egregious fraud.鈥�
The Government relies heavily on whistleblowers to report illegal kickback schemes.听 According to 91pornwhistleblower partner Gordon Schnell, 鈥淲e are finding companies employing ever-more sophisticated approaches to disguising these schemes to escape Government notice.鈥澨� For so many of these illicit arrangements, Schnell added, 鈥淭he only way the Government will learn about them is through those on the inside, with first-hand knowledge and experience.鈥�
That is why most False Claims Act cases involving kickbacks are originated by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring lawsuits on behalf of the Government against those that defraud the Government.听 Under these provisions, successful whistleblowers can receive up to 30% of the Government鈥檚 recovery.听 Over the past three decades, whistleblowers have recovered roughly $9.5 million in awards under the statute and have helped the Government recover more than $55 billion.
Unsurprisingly, a whistleblower — former Premier Medical employee Karen Mathewson — originated the action that uncovered the Premier Medical kickback scheme.听 She will receive a whistleblower award of an undisclosed amount from the proceeds of the Government鈥檚 recovery.
91pornhas substantial experience representing whistleblowers in False Claims Act cases alleging improper healthcare kickbacks.听 Two of our most recent successes in this area include a $135 million settlement against Indiana-based Community Health Network (for allegedly paying inflated salaries in exchange for referrals) and a $34.5 million settlement against Denver-based dialysis provider DaVita (for allegedly paying physicians and a competitor for referrals).
If you would like to learn more about any of these matters, illegal kickbacks more broadly, or what it means to be a whistleblower under the False Claims Act, please do not hesitate to contact us.听 We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
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