Dive Brief:
- Laboratory company Boston Heart Diagnostics agreed to pay approximately $26.7 million to resolve allegations it paid kickbacks to doctors disguised as investment returns in return for patient referrals in violation of the False Claims Act, the Department of Justice (DOJ) said Tuesday.
- The settlement also resolves allegations that Boston Heart conspired with Texas hospitals to improperly bill federal healthcare programs to receive higher reimbursements for lab tests, and that it provided physician practices with in-office dietitians in exchange for referrals for lab testing.
- Boston Heart in a separate announcement, said the agreement resolves all existing DOJ investigations into the company, and emphasized there were no claims that individual patients were harmed due to the alleged conduct. The company did not admit liability.
Dive Insight:
Since the original allegations, some dating back to 2012, Boston Heart has gained a new corporate owner, board of directors and management team. The new leadership is "committed to compliance with all federal and state laws, regulations and rules," Boston Heart said.
The Framingham, Massachusetts-based clinical diagnostics company was acquired in 2015 by Luxembourg-based Eurofins Scientific, which operates a network of more than 800 laboratories in 47 countries.
The DOJ alleged that, from 2015 to 2017, Boston Heart provided lab testing services to small Texas hospitals in exchange for per-test payments, working with the facilities' independent marketers to generate more referrals. The marketers allegedly set up management service organizations to make payments to physicians that were disguised as investment returns but were based on the doctors’ referrals for lab tests. Those tests were then billed to Medicare, Medicaid, and Tricare. Boston Heart helped identify physician targets, referred interested doctors and helped make sales pitches, according to the DOJ.
The settlement also covers an alleged conspiracy in which Boston Heart and the Texas hospitals submitted claims for outpatient laboratory testing for patients who were not hospital outpatients with the goal of obtaining higher reimbursements from federal healthcare programs.
In addition, the agreement with the DOJ resolves allegations that Boston Heart waived patient copays and deductibles and provided physician practices with in-office dietitians in exchange for physician referrals for laboratory testing. Those claims were first made in two cases filed under the whistleblower provision of the False Claims Act. The whistleblowers will receive about $4.36 million of the settlement, the DOJ said.
Boston Heart said the Office of Inspector General did not require a corporate integrity agreement as part of the settlement with the DOJ. The company said it now has in place a "highly functional and robust" corporate compliance program. "Boston Heart is a very different organization today compared to what it was then and up to two and a half years ago," Patrick Noland, who became company president in April 2017, said in a statement.
The DOJ recovered $2.88 billion in settlements and judgments in fiscal 2018 under the False Claims Act, mostly due to cases involving the healthcare industry. Healthcare-related fraud cases accounted for $2.51 billion of the total.
Last month, the DOJ announced a $20.3 million agreement with South Dakota-based Sanford Health to settle allegations one of the healthcare provider’s neurosurgeons received kickbacks related to use of implantable devices sold by his physician-owned distributorship.
