Businessman to Pay Over $27 Million for Medicare Fraud Involving Cancer Genomic Tests

Owner of Multiple Health Companies Admits to Submitting False Claims for Unnecessary Medical Tests

NEWARK, N.J. – Daniel Hurt, owner and operator of Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC, and Sonoran Desert Pathology Associates LLC, has agreed to pay over $27 million to settle allegations of Medicare fraud. Hurt and his companies were accused of submitting false claims for cancer genomic (CGx) tests that were not medically necessary and obtained through illegal kickbacks, in violation of the False Claims Act (FCA).

Hurt has also been excluded from participating in Medicare, Medicaid, and all other federal healthcare programs by the Department of Health and Human Services Office of Inspector General (HHS-OIG). This exclusion follows his guilty plea to criminal healthcare fraud for these offenses. The civil settlement reflects Hurt's ability to pay.

From January 2019 to November 2021, Hurt and his associates conspired to submit false claims for CGx tests by collaborating with telemarketing agents, telemedicine providers, reference laboratories, billing laboratories, and a hospital. These parties solicited Medicare beneficiaries for "free" CGx tests, prescribed tests that were not medically necessary, conducted the tests, and submitted claims for payment to Medicare.

“Medicare and Medicaid are two vitally important health care programs that provide critical services to millions of Americans. Schemes that seek to siphon money from these programs with unnecessary medical tests are especially egregious. We will do everything we can to protect the public and the services they need, and to hold accountable those who try to bilk the system,” stated U.S. Attorney Philip R. Sellinger.

Principal Deputy Assistant Attorney General Brian M. Boynton added, “We will not tolerate those who prey on older Americans to defraud Medicare."

Deputy Inspector General of Investigations Christian J. Schrank of HHS-OIG emphasized, “Submitting false claims jeopardizes the integrity of vital health care programs. This substantial settlement underscores our dedication to safeguarding federal health care programs.”

The settlement resolves allegations brought in three whistleblower cases, including one filed by Robert Gerstein, a minority owner of Sonoran Desert Pathology who worked for Hurt. Under the FCA, whistleblowers can file actions on behalf of the United States and receive a portion of the recovery. Gerstein will receive up to $4.7 million or 17% of the government’s recovery.

This resolution was achieved through a coordinated effort between the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Middle and Southern Districts of Florida, and the District of New Jersey, with assistance from HHS-OIG.

The claims resolved by the settlement are allegations only, with no determination of liability.

For tips and complaints about potential fraud, waste, abuse, and mismanagement, contact the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).