$1.5 Million+ Settlement Reached in National Laboratory Kickback Case

Marketing professionals and physicians across five states conclude agreements to settle allegations under the False Claims Act related to laboratory referral kickbacks.

In a substantial resolution to claims of healthcare fraud, two laboratory marketing professionals, their respective companies, and five physicians have consented to pay over $1.5 million. 

This settlement addresses accusations under the False Claims Act of participating in kickback schemes connected to laboratory referrals, an infraction of the Anti-Kickback Statute. The statute is a critical safeguard designed to ensure medical decisions remain unswayed by undue financial incentives, focusing solely on patient well-being.

The settlements come in the wake of allegations that implicated both the marketers and their companies in schemes involving illicit payments to doctors for laboratory service referrals. Such conduct, according to federal authorities, compromises the integrity of medical judgments, prioritizing financial gain over patient health.

George Carralejo of California, along with OC Genetic Consultants Inc., has agreed to a $400,000 settlement for their involvement in kickback schemes that spanned from August 2020 to September 2021. The schemes allegedly involved payments to physicians in Texas and Arkansas under the guise of consulting and medical director fees, aiming to influence their laboratory testing referrals to clinical laboratories in New Jersey and Virginia.

In a related settlement, Michael Jeresaty of South Carolina and Ralston Health Group Inc. will pay $320,000 for their role in similar arrangements, including payments to a Houston physician and a South Carolina doctor, both of whom referred laboratory tests to RDx Bioscience Inc. and other entities.

The physician settlements reveal a troubling pattern of kickbacks disguised as payments from management service organizations (MSOs) for laboratory referrals, spanning from Florida to Texas. The implicated physicians, Dr. Paul Bierig, Dr. Mohd Azfar Malik, Dr. Robert Ain, Dr. Barry Feinberg, and Dr. Rachel Feinberg, along with associated entities, have agreed to pay sums ranging from $100,632 to $342,466 to resolve these allegations.

These settlements underscore the Department of Justice's commitment to rooting out healthcare fraud and maintaining the integrity of medical decision-making. U.S. Attorney Philip R. Sellinger emphasized that kickbacks, by any name or through any intermediary, are detrimental to healthcare system integrity.

The collaborative efforts of the U.S. Attorney’s Office for the District of New Jersey, the Civil Division’s Commercial Litigation Branch, Fraud Section, and the Health and Human Services Office of Inspector General (HHS-OIG) played a pivotal role in achieving these settlements. These cases highlight the ongoing governmental focus on combating healthcare fraud, utilizing the False Claims Act as a key tool in this fight.

While the settlements resolve these allegations, there has been no formal determination of liability, reflecting the parties' agreement to conclude the matter without further litigation.