ONE MORE LAB COMPANY has settled allegations of fraud and abuse. Last month, UTC Laboratories agreed to pay a fine of $41.6 million and will be excluded from all federal healthcare programs for 25 years.
Announced Oct. 9, the settlement resolves allegations that UTC violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for pharmacogenetic testing and for billing Medicare for tests that were not medically necessary, the DOJ said.
In addition to these penalties, the three principals of New Orleans-based UTC Labs, which operated under the name Renaissance Rx, agreed to pay $1 million, the DOJ said.
The Times Picayune newspaper of New Orleans reported that the three principals were the owners: Tarun Jolly, MD; Patrick Ridgeway; and Barry Griffiths. The three men will jointly pay the $1 million fine, the newspaper added.
An anesthesiologist, Jolly operates Louisiana Pain Specialists and is on the boards of the American Cancer Society, the School of Public Health and Tropical Medicine at Tulane University, and the Isidore Newman School, a private high school in New Orleans, the newspaper reported. Last year, Jolly and his wife, Rupa Jolly, a dentist, contributed $3 million toward a new science and technology building at the Newman School.
In its case against Renaissance Rx, the DOJ alleged that from 2013 through 2017, the lab company and its principals paid physicians to induce them to order pharmacogenetic tests, purportedly in return for their participation in a clinical trial known as the Diagnosing Adverse Drug Reactions Registry.
In the scheme, the lab company paid sales commissions to some individuals and billed Medicare for pharmacogenetic tests that were not medically necessary, the DOJ said. “The payment of cash and thinly disguised referral bribes, as contended by the government, resulted in a more than $42-million-dollar resolution in this case,” Special Agent in Charge CJ Porter, of the Department of Health and Human Services Office of Inspector General, told the newspaper. Actually, the $41.6 million represents outstanding invoices owed to the lab company, the newspaper added.
Owners Banned for 25 Years
While the 25-year ban applies to a company that no longer exists, the owners and other affiliated officers may be barred from participating in Medicare, Medicaid, and the Children’s Health Insurance Program under a new Medicare rule now in effect called the Program Integrity Enhancements to the Provider Enrollment Process.
The settlement resolves allegations in six lawsuits pending in U.S. District Court for the Eastern District of Louisiana that were filed under the whistleblower provisions of the federal False Claims Act, the DOJ said. As of early October, the shares to be awarded to whistleblowers had not been determined.
In concluding its announcement, the DOJ said no determination of liability had been made, and that the claims settled in these cases were allegations only.