Whistleblower Rewarded for Reporting Scheme to Pay Kickbacks for Unnecessary Blood Tests

The Department of Justice announced on April 28, 2017, that Quest Diagnostics Inc. agreed to pay $6 million to resolve a False Claims Act (FCA) lawsuit that alleged Berkeley HeartLab Inc., of Alameda, California, violated the FCA by paying kickbacks to physicians and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests. Quest, which is headquartered in Madison, New Jersey, acquired Berkeley in 2011, and ended the conduct that gave rise to the settlement.

Physicians refer their patients to independent laboratories like Berkeley to conduct tests on blood samples. According to the government’s complaint, Berkeley paid kickbacks to referring physicians disguised as “process and handling” fees. The complaint also alleged that Berkeley paid kickbacks to patients by routinely waiving copayments owed by certain patients who were legally required to pay for part of their tests. Allegedly, Berkeley paid the kickbacks to induce both the physicians and patients who received them to choose Berkeley over other laboratories. The government’s complaint further alleged that these illegal practices resulted in medically unnecessary cardiovascular tests being charged to federal healthcare programs.

The FCA suit was filed by Dr. Michael Mayes using the qui tam, or whistleblower, provisions the act. The qui tam provisions allow private citizens to bring a suit on behalf of the government for false claims and share in any recovery. Dr. Mayes’ share of the settlement with Quest has not been determined.

“We rely on doctors to provide honest, independent recommendations regarding clinical testing,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Companies that pay kickbacks to referring doctors corrupt those doctors’ independence, leaving patients vulnerable to expensive and unnecessary testing.”

Related Links:

• DOJ Press Release: Quest Diagnostics Inc FCA Settlement
• False Claims Act Whistleblower Resources