Quest Diagnostics, the Secaucus-based lab testing giant, has agreed to pay $13,014,576 plus interest to resolve allegations that it used free suite seats at New York Giants home games and other exclusive football perks to induce health care providers to send it business. Federal prosecutors say the alleged scheme ran for nearly a decade, built around a relationship Quest struck with the Giants organization years earlier.
According to njtoday.news, the settlement resolves claims under the False Claims Act and the Anti-Kickback Statute, and the case began as a whistleblower lawsuit filed under the False Claims Act’s qui tam provisions, which allow private parties to sue on the government’s behalf and share in any recovery. As Hudson County View reports, prosecutors allege that between July 25, 2013, and August 3, 2022, Quest violated the Anti-Kickback Statute by offering free, exclusive entertainment to decision-makers at client practices to encourage laboratory testing referrals.
From Stadium Suites to Training Camp
The alleged entertainment traced back to a 2013 naming-rights and sponsorship agreement Quest entered into with the New York Giants, which provided the company suites at MetLife Stadium. Per the same account, that relationship opened the door to game-day suite seats, VIP training camp visits, draft chalk talks, and what prosecutors called Family Combine Days — events in which clients and their family members could participate in football drills led by Giants players.
The report also notes that Quest tracked the return on its investment in these free Giants events over the 2013 through 2016 football seasons, measuring whether the perks were paying off in referral business. Prosecutors allege Quest ultimately billed Medicare, New York Medicaid, and New Jersey Medicaid for tests referred by the very clients it had entertained.
Corporate Integrity Agreement and Whistleblower Payout
As part of the resolution, Quest Diagnostics entered a five-year Corporate Integrity Agreement with the HHS Inspector General’s Office. Three whistleblowers behind the original lawsuit — Dr. Gerard Abate, Lori Anderson, and Dr. Douglas S. Rabin — will receive a combined $2,472,769 as their share of the recovery, the outlet’s report states.
The U.S. Attorney’s Office for the District of New Jersey announced the settlement, with the matter handled for the government by Assistant U.S. Attorneys Susan J. Pappy and George L. Brandley. The FBI and the HHS Inspector General’s Office investigated the case.
Officials Weigh In on Enforcement
U.S. Attorney Robert Frazer said the agreement exemplified his office’s commitment to enforcing the False Claims Act and Anti-Kickback Statute, adding that kickbacks from lab companies corrupt medical judgment and waste taxpayer money. Naomi D. Gruchacz said such violations compromise medical judgment and threaten the integrity of federal health care programs, while FBI representative Stefanie Roddy said the bureau is committed to rooting out health care fraud in New Jersey and beyond.
Prosecutors emphasized that the claims resolved by the settlement are allegations only, and that liability has not been determined. The Anti-Kickback Statute broadly prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded health care programs, according to the U.S. Department of Justice.
Part of a Broader Pattern
Quest’s settlement is not an isolated case in the federal government’s ongoing scrutiny of laboratory referral practices. Earlier this year, the Department of Justice announced that laboratory executives, marketers, and a physician agreed to pay over $2 million to settle allegations of illegal kickbacks to doctors, and in a separate case last year, a laboratory CEO, marketers, and physicians faced a settlement of over $6 million concerning alleged management-service-organization and other lab testing kickbacks.
