DOJ Announces $5.7 Million Health Care Fraud Settlement

The Department of Justice Office of Public Affairs issued a press release last Friday detailing a settlement in a healthcare fraud case. Metric Lab Services and Metric Management Services LLC (collectively, Metric) and Spectrum Diagnostic Labs LLC (Spectrum) have agreed to pay $5.7 million to settle the claims that they violated the False Claims Act for unnecessary genetic testing.

Specifically, the allegations contended that both Metric and Spectrum caused false claims to be submitted to Medicare when they paid kickbacks to marketers in return for finding Medicare beneficiaries who would submit to medically unnecessary genetic testing.

Metric and Spectrum are clinical laboratories located in Mississippi and Texas, respectively. The clinical laboratories were accused of running a genetic testing fraud scheme with marketers who would intentionally solicit genetic testing samples from Medicare beneficiaries. A physician would then fraudulently confirm that the genetic testing samples were medically necessary, at which point Metric and Spectrum would run the tests and divide the Medicare reimbursement between themselves and the marketers.

As a way of concealing the scheme and money paid toward the marketers, Metric and Spectrum held sham agreements with the marketers in which they allegedly used their consulting and marketing services. Rather than using their services, the agreements were a way to cover up the funds that Metric and Spectrum were paying to the marketers from Medicare. The press release asserts that the marketers even “generated sham invoices for hourly services that matched the agreed-upon kickback amount.”

U.S. Attorney Philip R. Sellinger for the District of New Jersey said of the statement, “Rather than compete fairly for business, these labs engaged in a brazen kickback scheme to take in millions of dollars of Medicare money. A patient’s needs must guide medical decisions, not who is paying the biggest kickback.”

“When health care providers engage in kickback schemes, the trust of both patients and taxpayers are at risk.” Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of the Inspector General added.