Headlines that Matter for Companies and Executives in Regulated Industries

Government Brings FCA Action Against Laboratory Companies

On July 18, 2023, the US Department of Justice (DOJ) announced it has filed a complaint against multiple laboratory companies and their owner, Patrick Britton-Harr. According to the DOJ, the lab companies submitted claims to Medicare for lab tests that were not ordered by health care providers, not medically necessary, or in some instances never even performed, in violation of the False Claims Act (FCA).

The complaint alleges that Britton-Harr owned and operated multiple corporate entities that allegedly offered COVID-19 tests to nursing homes in order to submit claims to Medicare for a variety of medically unnecessary tests. The DOJ further alleges that the recipients of these tests had no symptoms requiring them, and often the tests were never ordered by health care providers. The complaint alleges that, in some instances, Britton-Harr and the lab companies he owns billed Medicare for tests that were never actually performed.

The complaint alleges six claims against Britton-Harr and his lab companies for violations of the FCA, unjust enrichment, and payment by mistake of fact. The DOJ seeks damages including, among other remedies, the amount by which the defendants were overpaid by Medicare.

The DOJ press release can be found here and the complaint can be found here.

Florida Men Plead Guilty to $67 Million Medicare Fraud

Following a four-day trial in the Southern District of Florida, two Florida men pleaded guilty for their participation in a scheme to defraud Medicare by billing over $67 million in false claims for genetic testing and durable medical equipment. The DOJ alleges that the defendants obtained the testing and equipment with improper kickbacks and that they were not medically necessary.

According to court documents, one of the men was the owner and manager of call centers and allegedly conducted fraudulent telemarketing campaigns targeting Medicare beneficiaries through those centers, soliciting them for genetic testing and durable medical equipment that was not medically necessary. The other man was an employee at these call centers and submitted false claims to Medicare for the genetic testing. Court documents further indicate that the men paid kickbacks to telemedicine companies in exchange for health care providers’ orders and falsified providers’ and patients’ signatures.

The owner pleaded guilty to conspiracy to commit health care and wire fraud and conspiracy to defraud the US government and to pay and receive kickbacks. The employee pleaded guilty to conspiracy to commit health care fraud. Both are scheduled for sentencing in December 2023. In this same case, five other defendants have already pleaded guilty. Three other defendants are scheduled for trial in September 2023.

The DOJ press release can be found here.

Health Records Vendor Agrees to Pay $31 Million to Resolve FCA Claims

On July 14, 2023, the DOJ announced that NextGen Healthcare Inc., a vendor of electronic health record technology, has agreed to pay $31 million to settle allegations that NextGen violated the FCA. The DOJ alleges that NextGen misrepresented the capabilities of its software and induced users to recommend the software by providing improper remuneration.

The settlement resolves claims brought under the qui tam provisions of the FCA by two health care professionals at a facility that used NextGen’s software. According to the complaint, NextGen fraudulently obtained a certification for its software by relying on a supplemental product that was designed solely to meet the certification and hid the actual capabilities of the software. Among other shortcomings, the software was allegedly not able to record vital sign data, translate data into required medical terminology, or create complete clinical summaries.

The government further alleges that NextGen violated the Anti-Kickback Statute by providing credits worth up to $10,000, or in some instances tickets to sporting events and entertainment, to users who would recommend the software.

The DOJ press release can be found here.