Inform Diagnostics pays $63.5 million to settle whistleblowers’ Antikickback Statute, Stark Law allegations

by Ben Vernia | February 18th, 2019

On January 30, the Department of Justice announced that Texas-based Inform Diagnostics had agreed to pay $63.5 million to resolve allegations brought by several whistleblowers that the company violated the Medicare Antikickback Statute and the Stark Law. According to DOJ’s press release:

Pathology laboratory company Inform Diagnostics has agreed to pay $63.5 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.  Inform Diagnostics, formerly known as Miraca Life Sciences Inc., is headquartered in Irving, Texas, and was a subsidiary of Miraca Holdings Inc., a Japanese company, during the period relevant to the case.  In 2017, majority ownership of the company changed, and the company was renamed.

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The settlement announced today resolves allegations that the company violated the Anti-Kickback Statute and the Stark Law by providing to referring physicians subsidies for electronic health records (EHR) systems and free or discounted technology consulting services.  The Anti-Kickback Statute and the Stark Law restrict the financial relationships that health care providers, including laboratories, may have with doctors who refer patients to them.  Although regulations adopted by the Department of Health and Human Services (HHS) in 2006 included provisions that allowed laboratories to provide EHR donations to physicians under certain conditions, the United States alleged that the defendant violated those conditions.  HHS withdrew those exemptions for laboratories in 2013.

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The government added that the relators’ share to be awarded to whistleblowers in three cases that led to the settlement has not yet been determined.

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