Sales reps for medical lab find evidence of unlawful kickbacks

On Behalf of | Feb 22, 2018 | Whistle-blower Claims

The Department of Justice (DOJ) recently announced a settlement in a pharmacogenomics whistleblower lawsuit. Pharmacogenomic testing analyzes a patient’s genetic makeup to help identify the proper drugs and doses of the drugs that may provide the best benefit for the individual patient’s condition.

In 2014, two sales representatives for a laboratory management company filed a “qui tam” lawsuit alleging that medical diagnostic testing laboratory and the laboratory management company created a fraudulent clinical research program that, according to the lawsuit, was scheme that used kickbacks to increase business for the laboratory.

Scheme Included Unlawful Referrals

The sales reps claim that the clinical testing facility and marketing company used representatives across the country to induce physicians to refer patients to the West Coast laboratory for pharmacogenomic testing services. The lawsuit says that the physicians were given kickbacks for referrals under the guise of paying the doctors for providing data for a clinical study.

The lab and lab management company also provided the doctors with access to medical technicians to perform in-house work, according to the DOJ. The technicians helped to facilitate unlawful referrals to the laboratory. The lawsuit further alleges that the defendants in the lawsuit also evaluated the quality and volume of referrals from doctors when evaluating compensation for the referrals. The government says that at least some tests that were submitted to Medicare for reimbursement were not medically necessary.

Settlement Reached

The clinical testing laboratory and the management company agreed to settle the lawsuit, without admitting fault. The laboratory has agreed to pay $3,500,000 under the False Claims Act to settle the litigation. The management and marketing company has agreed to pay $270,000.


Whistleblowers to Recieve $754,000

Whistleblowers who initiate a qui tam claim under the False Claims Act receive a portion of any settlement or verdict. The government relies on the eyes and ears of workers to uncover fraud in government contracts. Whistleblowers are often people who work for a company that has contracted with the government. In this settlement, the whistleblowers, who were sales reps, will receive $754,000, according to the DOJ.


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