False Claims Act Reaches Alleged Genetic Testing Kickback Scheme

With the government healthcare dollars flowing into genetic testing, it was only a matter of time before False Claims Act settlements popped up in this emerging area of healthcare. The first case resolved in late 2015, when a medical diagnostic laboratory, Pathway Genomics Corporation, agreed to pay the government $4 million. According to the government, Pathway offered physicians and medical groups reimbursements of up to $20 for each saliva kit they collected and submitted to Pathway for genetic testing. The government alleged that most of the physicians had never ordered these costly genetic tests before enrolling in Pathway’s reimbursement program. Supposedly, Pathway then sought government reimbursement for a sizable percentage of the tests.

While the medicine might be new, the alleged kickback scheme is as old as the hills. Illegal kickback schemes seem to increase as market competition tightens. With a whistleblower reward and far-reaching liability provisions, the False Claims Act, a Civil War-era law, is well-equipped to reach most modern-day healthcare fraud schemes, including kickbacks paid by genetic labs.

More information for whistleblowers is located at the Nolan Auerbach & White website.