A federal court in Kentucky has ordered a Massachusetts-based clinical laboratory to pay $1,374,058 in damages for submitting false claims to federal healthcare programs.
The U.S. District Court entered the civil judgment against Calloway Laboratories, Inc. (“Calloway”) on charges of committing healthcare fraud, specifically for inducing or rewarding referrals of urine drug testing.
According to the court documents, between May 2014 and November 2014, Calloway provided free testing supplies to physicians in exchange for referrals of urine drug testing, which it then submitted to Medicare and TRICARE for payment.
The provision of free testing supplies to induce or reward referrals violates the Anti-Kickback Statute and the Stark Law, both of which are intended to ensure that medical decision-making is based on the best interest of the patient and not compromised by improper financial incentives.
In a statement, U.S. Attorney Robert M. Duncan, Jr. said, “Offering financial incentives to physicians in exchange for patient referrals undermines the integrity of our health care system.”
The Government’s investigation began with the filing of a whistleblower lawsuit brought by a former Calloway employee under the qui tam provisions of the False Claims Act.
The U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations, the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, and the U.S. Attorney’s Office for the Eastern District of Kentucky handled the case.
Assistant U.S. Attorneys Christine Corndorf and Carrie B. Pond represented the United States in the matter.
Key Facts
- State: Kentucky
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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