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A federal judge in South Carolina imposed civil damages and penalties totaling more than $114 million on the former CEO of a medical testing lab and two owners of the lab’s marketing partner for violations of the False Claims Act. The case was brought by whistleblowers.
The defendants were found guilty of civil fraud against Medicare and other federally funded healthcare programs, the result of three separate qui tam cases brought and litigated together.
Tonya Mallory, former CEO of Health Diagnostic Laboratory (HDL) in Richmond, VA, and Floyd Calhoun Dent III and Robert Bradford Johnson, owners of BlueWave Healthcare Consultants, an Alabama marketing company, must pay more than $111 million in treble damages and penalties for fraud relating to HDL’s arrangement with BlueWave to market HDL blood tests in part by offering illegal kickbacks to physicians who ordered the tests.
Prosecutors said the alleged scheme involved paying doctors $20 processing and handling fees for ordering the unnecessary tests. HDL submitted 35,074 false claims to the government.
BlueWave owners Dent and Johnson were additionally found liable in a related kickback plan, which prosecutors said provided a $10 processing and handling fee to physicians to encourage them to order unnecessary tests at another specialty blood lab, California-based Singulex, Inc.
That arrangement was responsible for another 3,813 false claims to federally insured healthcare programs, costing the government $467,935. Dent and Johnson were penalized more than $3 million for that part of the plan.
More information is available at: https://bit.ly/2EqqGpL.
Financial Disclosure: Author Greg Freeman, Editor Jill Drachenberg, Editor Jesse Saffron, Editorial Group Manager Terrey L. Hatcher, and Nurse Planner Maureen Archambault report no consultant, stockholder, speaker’s bureau, research, or other financial relationships with companies having ties to this field of study. Consulting Editor Arnold Mackles, MD, MBA, LHRM, discloses that he is an author and advisory board member for The Sullivan Group and that he is owner, stockholder, presenter, author, and consultant for Innovative Healthcare Compliance Group.