Kickback Case Results in Jury Verdict Exceeding $50 Million

King & Spalding
Contact

A South Carolina jury found three individuals liable for violations of the Federal False Claims Act (FCA) in a qui tam whistleblower action in which DOJ intervened. The defendants, owners of a specialized laboratory company and an affiliated marketing company, were found to have operated a scheme to pay kickbacks to physicians for laboratory test referrals.

The defendants paid referring physicians “process and handling” fees ranging from $10 to $20 for each laboratory test ordered. The whistleblowers and DOJ alleged that these payments were made to induce referrals and therefore constituted illegal kickbacks prohibited under the federal Anti-Kickback Statute, meaning that all Medicare and TRICARE claims for which these payments were made were submitted in violation of the FCA.

All three defendants were found jointly and severally liable for submitting over 35,000 false claims worth over $16.6 million. Two of the defendants were also found liable for submitting over 3,000 false claims worth over $400,000. Under the FCA, these amounts are automatically trebled, resulting in potential total liability of over $50 million.

The case is United States ex rel. Lutz v. BlueWave Healthcare Consultants Inc., No. 9:14-cv-00230-RMG (D.S.C.). A copy of DOJ’s Complaint in Intervention is available here.

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.