The Department of Justice issued a press release on Monday regarding complaints they had filed against the CEOs of two medical testing laboratories as well as hospitals in the states of Texas, New York, and Pennsylvania. The complaint was made over alleged violations of the Anti-Kickback Statute and the Stark Law from patient referrals. The defendants also “improperly billed to federal healthcare programs for laboratory testing.”
True Health Diagnostics LLC (THD) and Boston Heart Diagnostics Corporation (BHD) are detailed in the complaint as having conspired with hospitals in Texas. The companies purportedly paid doctors to induce referrals to the hospitals for laboratory testing that would then be performed by THD and BHD.
In an effort to conceal their actions, the recruiters from BHD and THD set up management service organizations that would disguise the kickbacks given to the doctors as investment returns. The kickbacks were offered by BHD and THD executives as a way to “increase referrals and, in turn, their bonuses and commissions.”
The laboratory tests that were conducted as a result of the scheme were then billed to different health care programs, the Department of Justice said. The tests were both improperly induced and at times, not even medically necessary. The hospitals would record the tests as outpatient services as a means of increasing the reimbursement rate. THD allegedly paid other forms of kickbacks as a way to induce laboratory testing referrals.
The Principal Deputy Assistant Attorney General at the Department of Justice, Brian M. Boynton, explained that the department is “committed to holding accountable individuals and entities who commit and profit from healthcare fraud,” adding that they will continue to pursue entities like the defendants who “enter into unlawful financial arrangement that waste taxpayer dollars, improperly influence healthcare providers’ medical judgments and subject patients to unnecessary testing or other services.”
U.S. Attorney Brit Featherston stated that the medical decision-making process had been corrupted by the illegal kickbacks, and that the kickbacks could not be immunized by “attempting to disguise the kickbacks as some sort of investment arrangement.”
