Client billing settlement for alleged kickback payments

October 5, 2015

Alert

The Boston Division of the FBI announced a $558,793 settlement with Strata Pathology Laboratory, Inc. on Oct. 1, 2015, to settle allegations that the laboratory violated the federal False Claims Act.

The settlement was based upon certain consulting agreements between the laboratory and referring physicians as well as account billing arrangements with referring physicians. In the account billing arrangements, the physicians purchased the pathology services for private payors at a discount from the laboratory, marked up the price, and then re-billed the private payors, profiting from the spread in the purchase price and the reimbursement amounts. The government alleged that the discounted pricing constituted a kickback in exchange for the referral of specimens for federal health care program beneficiaries to the laboratory.

This settlement stemmed from a complaint filed by a former laboratory employee under the whistleblower provisions of the federal False Claims Act. You can get more information from the official FBI press release.

If you have questions regarding your own client billing arrangements, please contact the attorney listed below.

Over the past 24 months, the U.S. Department of Health and Human Services Office for Civil Rights has brought notable enforcement efforts against several non-profit covered entities and business associates, resulting in instances of six and seven-figure penalties against providers across the county for incidents involving breaches of protected health information.

A new amendment to New York state law, which would have required all healthcare providers to obtain separate consents from patients for treatment and payment is on hold until further guidance is released, according to the New York Department of Health.

On November 1, 2024, the Centers for Medicare & Medicaid Services issued the Medicare Physician Fee Schedule 2025 final rule, which establishes new advanced primary care management billing codes that will expand opportunities for physician practices, federally qualified health centers, rural health clinics and other health care providers to get paid for services provided by clinical staff under the direction of a physician, nurse practitioner or physician assistant beginning January 1, 2025.

Client billing settlement for alleged kickback payments

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