Qui Tam Whistleblower Suit Leads to $370 Million in Judgements for Lab Testing Scheme


On September 26, Roger B. Handberg, the U.S. Attorney for the Middle District of Florida, announced that the U.S. had obtained more than $370 million in judgements against Rajen Shah, a Kentucky businessman, and his companies for a laboratory testing scheme targeting Medicare that violated the False Claims Act (FCA).

According to the United States’ allegations, “Shah caused his laboratories to bill Medicare for expensive molecular tests that were not ordered by a licensed healthcare provider.” On September 21, a district court awarded judgment in favor of the United States and against Shah and his companies, United Diagnostics Lab, Tomoka Medical Lab, Tennessee Valley Regional Laboratory, Luminus Diagnostics, and Golden Rule Management.

The case originated from a qui tam whistleblower suit brought by Jacqueline Cushing, a former Tomoka employee. The False Claims Act’s qui tam provisions enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.

“The integrity of our healthcare system depends on the government being able to rely on accurate and truthful information submitted by laboratories, and that labs only bill for services ordered by a beneficiary’s doctor or nurse practitioner,” said U.S. Attorney Handberg. “We will continue to hold people accountable when they disregard Medicare’s regulations.”

“Providers who seek to boost their own profits by submitting inaccurate billing information to federal health care programs like Medicare undermine the integrity of these programs, which beneficiaries rely on for safe and effective health care services,” stated Acting Special Agent in Charge Julie Rivera of the U.S. Department of Health and Human Services Office of Inspector General. “Our agency, working with our law enforcement partners, will continue to investigate health care fraud schemes, including those involving providers allegedly submitting fraudulent claims in violation of the False Claims Act.”

On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.

“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”

Further Reading:

United States Obtains More Than $370 Million In Judgments Against Kentucky Businessman And His Companies For Laboratory Testing Scheme That Targeted Medicare

Bipartisan Legislation Unveiled to Strengthen False Claims Act

More False Claims Act Whistleblower News

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