A Georgia-based genetic testing laboratory has agreed to pay up to $200,000 to resolve whistleblower claims that they paid kickbacks to Aiken Counseling Group, LLC (Aiken) to incentivize genetic testing referrals. According to a September 16 U.S. Department of Justice (DOJ) press release, Alpha Genomix Laboratories, Inc. (Alpha Genomix) allegedly paid kickbacks to Aiken in the form of paying the salary of one of Aiken’s employees. The government claims that most of the referrals for genetic tests ordered between April 2015 and December 2016 were “not legitimately ordered by a physician and were medically unnecessary.” This combined with the alleged payment of kickbacks might have constituted a violation of the False Claims Act.
The settlement is structured so that Alpha Genomix will pay $35,000 of the settlement now, and then “a percentage of gross annual revenues” of the company up to a maximum of $200,000 total. In February of 2020 Lain Bradford, the owner of the Aiken Counseling Group, was sentenced to three years of probation and ordered to pay restitution after pleading guilty to “health care fraud and drug offenses in a related case.” Aiken went bankrupt in 2018, and no longer functions as a Counseling Group.
“Providers participating in Medicare and Medicaid are expected to uphold the integrity of the programs,” stated Derrick L. Jackson, Special Agent in Charge with the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Companies that seek unmerited payment for unnecessary and illegitimate services abuse the programs and divert funds meant to improve the health and prolong the lives of beneficiaries. HHS-OIG and our partners will actively pursue those who commit health care fraud.”
The False Claims Act allows individuals to sue on behalf of the government when they experience fraud in the workplace. Whistleblowers, or relators as they are legally known, are eligible for an award of 15 to 30% of the total amount recovered by the government. The reward money is taken directly from the recovered sum, ensuring that taxpayer money is never touched in the process.
The whistleblower in this case was an unnamed psychiatrist who worked at Aiken at the time. The government has not yet decided the amount that the whistleblower will receive in return for their public service.
The past few months have seen a high number of False Claims Act medical fraud settlements, with at least three settlements having been announced in the past two weeks. While liability is not often determined in these cases, settlements are a way for the government to save the money needed to fully prosecute for liability, which is often far more expensive than arriving at a settlement with the defendant. This settlement proves once again that the False Claims Act is effective at incentivizing potential whistleblowers to stand up and report fraud.
Read the DOJ’s press release here.