Boston Heart laboratory pays over $26 million to settle whistleblowers’ allegations of kickbacks, Stark Law violations

by Ben Vernia | December 2nd, 2019

On November 26, the Department of Justice announced that Boston Heart Diagnostics Laboratory had agreed to pay $26.67 million to settle allegations, originally brought by whistleblowers, that the laboratory company violated submitted claims to federal healthcare programs tainted by violations of the Medicare Anti-Kickback Statute and the Stark Law. According to DOJ’s press release:

Laboratory Boston Heart Diagnostics Corporation (Boston Heart), of Framingham, Massachusetts, has agreed to pay $26.67 million to resolve False Claims Act allegations involving payments for patient referrals in violation of the Anti-Kickback Statute and the Stark Law, as well as claims otherwise improperly billed to federal healthcare programs for laboratory testing, the Department of Justice announced today.
The settlement announced today resolves allegations that Boston Heart conspired with others to pay doctors kickbacks disguised as investment returns.  From 2015 to 2017, Boston Heart allegedly agreed to provide laboratory testing services to small Texas hospitals in exchange for per-test payments.  To generate more referrals for the hospitals and more money for itself, Boston Heart allegedly coordinated with the hospitals’ independent marketers, who set up companies known as management service organizations (MSOs), to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals.  Boston Heart allegedly helped the MSOs identify physician targets, referred interested physicians to the MSOs to secure their business, and participated with the MSOs in sales pitches to offer physicians money in exchange for referrals.  As a result, physicians allegedly referred patients to the Texas hospitals and Boston Heart for laboratory tests performed by Boston Heart, which were then billed to Medicare, Medicaid, and TRICARE. 
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The settlement also resolves allegations that Boston Heart conspired with the Texas hospitals and others to submit claims for outpatient laboratory testing for patients who were not hospital outpatients, in order to receive higher reimbursements from federal healthcare programs.

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The Government also announced that the whistleblowers will receive $4.36 million (a 16% relators’ share).

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