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Patients Choice Laboratories, an Indianapolis diagnostic lab, will pay $9.62 million to settle allegations that it submitted improper Medicare claims and used kickbacks to generate business, the U.S. Department of Justice announced Monday.
The government says the lab billed Medicare for respiratory pathogen panels that were unnecessary or tied to improper referral arrangements. According to the government, the company also paid commissions to independent sales representatives based on the volume of testing they helped generate.
PCL did not immediately respond to The Indiana Lawyer’s request for comment. According to the U.S. Attorney’s Office for the Southern District of Indiana, the claims resolved by the settlement are allegations only; there has been no court determination of liability.
One of the central allegations involves a November 2020 marketing agreement between PCL and a company that claimed to provide infection-prevention services in long-term care facilities. The government says say the deal—$5,000 per month for “marketing and management services”—was a pretext for paying the firm for test referrals.
The government alleges the infection-prevention company collected COVID-19 swabs from long-term care residents, and PCL used those samples to conduct and bill Medicare for additional respiratory panels that were not medically necessary. In some instances, prosecutors say, PCL billed for the panels without performing any COVID-19 tests.
Between December 2020 and May 2022, the infection-prevention company was paid roughly $1.86 million for referrals, while PCL received more than $6 million in Medicare reimbursements for tests performed in 43 long-term care facilities nationwide.
U.S. attorneys in Indiana and Maryland said the arrangements drove unnecessary testing and undermined safeguards meant to prevent fraud in federal health programs.
“This settlement reflects our commitment to holding accountable those who seek to profit at the expense of federal healthcare programs and the patients they serve,” Tom Wheeler, U.S. Attorney for the Southern District of Indiana, said in a news release.
The settlement was handled by the Justice Department’s Civil Division, U.S. attorney offices in Maryland and Indiana and investigators from Department of Health and Human Services’ Office of Inspector General and the FBI.
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