Manager/Sales Representative of Defunct Drug Testing Lab Pay $649,407 to Settle False Claims and Violation of Anti-Kickback Statute
The former sales representative and manager of a now defunct North Carolina urine drug testing laboratory recently paid $649,407 to resolve claims by the U.S. Attorney’s Office that he participated in schemes to illegally induce physicians to send medically unnecessary urine drug tests to the laboratory.
The United States alleged that the former sales representative and manager, along with other agents of the laboratory, provided benefits to physicians to induce them to send urine samples to the lab for drug testing when they were not medically necessary. The complaint alleges that the accused actions violated the Anti-Kickback Statute, which makes it illegal for any person to knowingly and willfully solicit, receive, or offer to pay any remuneration in exchange for the referral of items or services that are paid for by a federal health care program. The United States also alleged that the laboratory submitted claims to Medicare for these tests in violation of the False Claims Act.
The United States alleged that the accused received payments from the laboratory to channel urine drug tests to the facility from the physician practices that he managed. The United States further alleged that the defendant, along with a co-defendant in the case, provided equipment and related services to physicians in exchange for those physicians sending urine drug samples to the laboratory.
Compliance Perspective
Using a laboratory that has violated the False Claims Act by paying kickbacks to physicians or other healthcare providers in violation of the federal Anti-Kickback Statute may be considered violation of state and federal regulations, and may result in exclusion from receiving Medicare and Medicaid reimbursements as a healthcare provider.
Discussion Points:
- Review policies and procedures regarding screening for excluded individuals and debarred contractors to avoid association with those with a history of submitting false claims and paying kickbacks.
- Train staff regarding the Anti-Kickback Statute and the False Claims Act and the protocols for performing background checks of potential vendors.
- Periodically audit vendors to ensure that they have not been excluded from Medicare and Medicaid.
