Physician’s Whistleblowing Leads to $4 Million False Claims Act Settlement Over Kickback Allegations


On April 2, the U.S. Attorney for the Western District of Texas announced that Oncology San Antonio, PA, and affiliated physicians, as well as CorePath Laboratories, PA have agreed to settle allegations of False Claims Act (FCA) violations. The settlements amount to $1.3 million and $2.7 million, respectively, resolving claims that the two entities engaged in illegal kickback practices starting August 2016. According to the government, CorePath Laboratories, a diagnostic reference laboratory, paid $115 for each biopsy referral by physicians at Oncology San Antonio, a hematology and oncology practice, to their separate private practices.

The U.S. argued that “payments for referrals of biopsies constituted kickbacks within the meaning of the Anti-Kickback Statute and that the terms of the written agreement between Oncology San Antonio and CorePath Laboratories failed to meet any statutory safe harbor. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by a federal health care program, such as Medicare, Medicaid, or TRICARE. Claims submitted in violation of the Anti-Kickback Statute may give rise to liability under the False Claims Act.”

The government also charged Dr. Jayasree Rao, a physician at Oncology San Antonio and owner of a private practice, with billing federal healthcare programs for medically unnecessary tests and services. As part of the settlement, Dr. Rao agreed to enter a three-year Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

The settlement resolves claims brought under qui tam whistleblower provisions by physician Dr. Slavisa Gasic, a physician formerly employed by Dr. Rao.

The FCA’s qui tam provisions enable private citizens (like Dr. Gasic) to file lawsuits on behalf of the government if they have knowledge of fraud. Whistleblowers meeting certain criteria are entitled to 15 to 30% of the government’s recovery with successful prosecution.

In the press release regarding this announcement, the U.S. Attorney’s Office underscored the FCA as “One of the most powerful tools” in the government’s fight against healthcare fraud.

The False Claims Amendments Act of 2023, a bipartisan effort introduced on July 25, seeks to correct a few technical loopholes used to circumvent the FCA. The bill is widely supported by whistleblower advocates. One such advocate, attorney Stephen M. Kohn argues that “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”

Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reformsNational Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.

Join NWC in Taking Action:

Demand that Congress strengthen the False Claims Act

Further Reading:

Oncology Practice, Physicians, and Reference Laboratory To Pay Over $4 Million to Settle False Claims Act Allegations

Bipartisan Legislation Unveiled to Strengthen False Claims Act

More False Claims Act Whistleblower News

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