Patients Choice Laboratories (PCL), an Indianapolis-based diagnostic lab, has agreed to a hefty $9.62 million settlement over accusations of violating the False Claims Act and engaging in kickback schemes, according to the U.S. Attorney’s Office for the Southern District of Indiana. The laboratory was alleged to have engaged in practices such as billing Medicare for unnecessary respiratory pathogen panel (RPP) tests and rewarding referrals through under-the-table payments.
In a detailed case, it's been alleged that PCL entered a Marketing Services Agreement with a supposed infection prevention company on November 20, 2020, under which they paid $5,000 monthly for what was dubbed as "marketing and management services" at long-term care facilities. According to the allegations obtained by the Justice Department, this agreement was merely a front for buying test referrals, which were then inappropriately billed to Medicare.
Furthermore, the government claims that PCL paid the aforementioned company to collect samples in long-term care centers, using the same specimens to run and bill Medicare for RPPs that were medically unnecessary. Tom Wheeler, U.S. Attorney for the Southern District of Indiana, stated, "Kickback arrangements that drive unnecessary testing waste taxpayer dollars and undermine the integrity of our healthcare system." The period between December 2020 and May 2022 saw PCL pay out roughly $1.86 million for RPP referrals, receiving over $6 million in return from Medicare.
PCL's strategies also included paying commissions to independent 1099 representatives based on the revenue from tests they spearheaded, despite these individuals not being bona fide employees. "Wasteful spending fueled by kickback arrangements undermines the public’s confidence in our health care system," observed Mario M. Pinto, Special Agent in Charge of the HHS-OIG Chicago Regional Office, who helped swab residents for COVID-19. During just a three-month span in 2021, PCL's commission payments to such representatives amounted to at least $372,000.
The collaborative efforts of the Civil Division’s Fraud Section, the HHS-OIG, and the FBI, have been pivotal in handling the case leading to the settlement. Maureen Dixon, Special Agent in Charge of the HHS-OIG, framed the issue starkly: “Entities who submit false Medicare claims destroy public trust in federal health care programs and divert taxpayer-funded resources away from vulnerable citizens who truly need them.” While no determination of liability has been made, the resolution of these claims continues to underscore the government's stance against healthcare fraud and the need for whistleblower vigilance.
