Why Medicare Fraud Hurts Entire Lab Industry

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IT’S THE $1 BILLION LAB FRAUD that no one realized had grown that big! In this special issue of THE DARK REPORT, you’ll read about how the next chapter of the federal whistleblower lawsuit against three specialty cardiology labs and certain individuals has pulled the curtain open on what we think is the biggest case of laboratory fraud and abuse in the past 30 years.

Simply said, federal prosecutors allege in court documents that, between 2010 and 2014, the defendants paid illegal inducements to physicians totaling $80 million in exchange for lab test referrals. Court documents say that the labs filed false claims and were paid $500 million by the federal Medicare and Tricare programs!

If these allegations hold up in court, this is the biggest single case of lab fraud and abuse in the last 30 years. Plus, you can double that $500 million and make it a $1 billion fraud case. That’s because, if these labs were offering inducements for Medicare patient referrals, they may have done the same for private patients. In fact, in this issue, you’ll learn that two insurers have sued one of the lab companies and both insurers stopped paying claims submitted by this lab.

Also in this issue, we will also introduce you to the two richest sales reps in the lab industry. During the 2010 to 2014 period, they took distributions of $116 million from the company they founded that provided sales services to the labs named in the whistleblower lawsuits.

This is important news for all, particularly lab managers and pathologists who work in hospitals and health systems. Lawyers in these institutions are diligent in complying with federal and state anti-kickback laws. So their labs follow a conservative compliance policy.

But that is not the case with the handful of private lab companies that are always too willing to play fast and loose with compliance. Since they seldom are criminally prosecuted, they are willing to offer inducements to generate lots of revenue and the worst they think will happen is that, if the feds come after them, a civil settlement will result and they will pay back just a portion of the profits that resulted from their loose compliance practices.

Thus, if you would like to see the feds crack down on these aggressive busi- ness practices, it would be timely to let the Department of Justice know that you’d like to see swifter enforcement of federal law, along with tougher penalties.

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