Guardant Health, Inc., the precision oncology company headquartered in Palo Alto, has agreed to a settlement of over $900,000 after allegations surfaced that it knowingly violated the False Claims Act, as well as the Defense Health Agency regulations. This follows an announcement made by U.S. Attorney Ismail J. Ramsey, together with officials from the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS).
The allegations stemmed from a case where a physician in Austin, Texas, recommended a close friend and later his step-daughter to be employed at Guardant. Once employed, the physician's referral of services to Guardant subsequently spiked, indicating a potential quid pro quo arrangement. Through these actions, Guardant is alleged to have violated the Stark Law – a statute that governs physician referrals and prohibits conflicts of interest – and to have submitted false claims to Medicare Part B and TRICARE, as reported by the U.S. Department of Justice.
In response to the government's claims, Guardant Health took what the United States acknowledges as "significant steps" towards remediation, including voluntarily disclosing the conduct to the HHS-OIG. The company has agreed to pay $913,932.93 to resolve the False Claims Act allegations and an additional $31,082.00 in an administrative settlement with DHA, detailed by the prosecutors handling the case, per the U.S. Department of Justice.
"This Office is committed to holding accountable individuals and entities who commit and profit from healthcare fraud," U.S. Attorney Ramsey stated, highlighting the importance of legal integrity within healthcare decision-making. "We will continue to pursue those who enter into unlawful arrangements that waste taxpayer dollars and corrupt the integrity of healthcare decisionmaking." In light of the allegations, Guardant swiftly terminated the employment of the physician's family member. It ceased billing federal health care programs for tests ordered by the physician, a point emphasized by the officials involved, according to the U.S. Department of Justice.
Acting Special Agent in Charge Jeffrey McIntosh of the U.S. Department of Health and Human Services Office of Inspector General underscored the gravity of such illegal referrals, "Illegal referrals and incentives undermine the integrity of our federal healthcare programs". The sentiment was mirrored by Special Agent in Charge Denny in reminding them that the government remains dedicated to preserving the quality of federal healthcare services, especially for military members and their families who rely on TRICARE, as cited by the U.S. Department of Justice.
