Lab Pays $4M to Settle Doctor-Kickback Claims | Courthouse News Service
Thursday, November 30, 2023
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Lab Pays $4M to Settle Doctor-Kickback Claims

SAN DIEGO (CN) - A San Diego-based medical diagnostics laboratory paid over $4 million to settle claims it gave kickbacks to physicians who referred patients to the company for genetic testing.

Pathway Genomics Corporation paid $4,036,622.74 in a civil settlement of claims it paid doctors in exchange for patient referrals for their genetic testing kits that analyze the risks for certain genetic cancers and diseases and test the responsiveness of certain medications. The tests are performed using a saliva sample that is typically collected by a patient's doctor and mailed to Pathway's lab for testing.

Federal investigators found Pathway violated the False Claims Act by offering physicians and medical groups reimbursements of up to $20 for each saliva kit they submitted for genetic testing. Individual physicians cashed in as much as $13,534 in kickbacks from Pathway and most had not ordered the costly genetic tests prior to enrolling in the reimbursement program, according to U.S. Attorney Laura Duffy.

Prosecutors also claimed Pathway billed federal health care programs such as Medicare and TRICARE to foot the cost of the testing.

Pathway has since discontinued the physician reimbursement program.

While Pathway's website does not list the cost of each individual genetic test, tests can range from under $100 to more than $2,000 depending on the complexity of the test according to the National Library of Medicine

The federal Anti-Kickback Statute and False Claims Act prohibit offering, paying, soliciting or receiving money or gifts in referral for goods or services covered by federally funded health care programs.

"The defendants allowed greed to corrupt their trusted relationship with their patients and ultimately affect patient care decisions," FBI Special Agent in Charge Eric S. Birnbaum said.

"Today's settlement should make it abundantly clear that the FBI and our law enforcement partners will not allow kickbacks and bribes to influence patient care decisions."

The complaint was investigated by a team of law enforcement agencies including the U.S. Attorney's Office, the Department of Health and Human Services - Office of Inspector General, the Defense Criminal Investigative Service and the FBI.

The suit was originally brought in the U.S. District Court for the Southern District of California by whistleblower and former Pathway employee Monique Gipson, who received $686,225 in the settlement.

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