Diagnostic Laboratory Agrees to Pay $1.6 Million to Settle False Claims Act Allegations

Genetic Technological Innovations, LLC, a diagnostic laboratory based in Scottsdale, Arizona, has agreed to pay the United States $1.635 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Statute. The settlement, announced by the U.S. Attorney’s Office for the District of Maryland, addresses claims submitted to Medicare for respiratory pathogen panels that were allegedly medically unnecessary or procured through illegal kickbacks.

The government’s allegations center on a Marketing Services Agreement (MSA) that Genetic Technological Innovations, LLC (GTI) entered into on June 5, 2020, with another company. This company was reportedly an infection prevention entity tasked with providing “marketing-and-management services” within long-term care facilities. Under the terms of the MSA, GTI agreed to pay this company between $4,000 and $4,500 monthly for each long-term care facility it serviced. However, the U.S. contends that this agreement was a cover for illegal payments made to the company in exchange for referrals of laboratory tests that GTI then billed to Medicare. These alleged payments for referrals are considered a violation of the Anti-kickback statute.

Further complicating the situation, the U.S. alleges that the marketing company collected specimens from residents in long-term care facilities, including for COVID-19 testing. GTI then allegedly used these same specimens to conduct and bill Medicare for respiratory pathogen panels (RPPs). These RPPs were reportedly more profitable than standard COVID-19 tests, with Medicare reimbursement for RPPs being approximately ten times higher than that for COVID-19 tests alone. The RPP tests were allegedly performed between June 2020 and January 6, 2021, and were often “stacked” on top of COVID-19 tests when facilities had only requested the latter.

A key aspect of the government’s claims is that these RPPs were not ordered based on an individualized assessment of each patient’s medical needs by their physicians. Instead, GTI allegedly administered the same panel of respiratory tests to nearly every resident in a facility, irrespective of whether those residents displayed symptoms that would warrant such comprehensive testing. This practice, the U.S. asserts, demonstrates a lack of personalized medical evaluation.

The settlement serves as a reminder of the government’s efforts to combat healthcare fraud. Individuals who suspect fraud, waste, abuse, or mismanagement within federal health care programs are encouraged to report such concerns to the Department of Health and Human Services by calling 800-HHS-TIPS (800-447-8477). It is important to note that the claims resolved by this settlement are allegations, and no determination of liability has been made.

Article by Mel Anara, based upon information from the U.S. Attorney’s Office for the District of Maryland.

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