Orlando-based laboratory settles kickback allegations for 1.1 million

by Ben Vernia | November 9th, 2023

The Department of Justice announced on November 2 that Orlando-based Genesis Reference Laboratories, LLC, had agreed to pay $1.1 million to settle allegations that the company paid kickbacks to physicians for referring patients for laboratory services. According to DOJ’s press release:

Clinical laboratory Genesis Reference Laboratories LLC (Genesis), of Orlando, Florida, has agreed to pay $1,195,845 to resolve False Claims Act allegations that its marketers paid illegal kickbacks to healthcare providers in violation of the Anti-Kickback Statute to induce laboratory testing referrals. Genesis has agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged scheme.

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The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement announced today resolves allegations that from 2019 to 2021 Genesis paid marketing companies Corum Group LLC, Provisional Medical Consultants LLC and RMC Medical LLC to arrange for and recommend that healthcare providers in Missouri and Texas order Genesis’ laboratory tests, and the marketing companies kicked back a portion of those payments to referring healthcare providers, in violation of the Anti-Kickback Statute. The health care providers allegedly were paid using purported management services organizations (MSOs), which attempted to disguise the kickbacks as investment returns but actually offered the payments to health care providers to induce laboratory testing referrals to Genesis. The settlement resolves allegations that, despite knowing of the MSO kickbacks to health care providers and receiving those providers’ subsequent patient referrals, Genesis nevertheless submitted to Medicare the claims for laboratory testing ordered by those providers, in violation of the False Claims Act.

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The case apparently arose from a government investigation, rather than from a whistleblower’s qui tam lawsuit.

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