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White Collar + Fraud + Investigations + Compliance

Posts in Anti-Kickback Statute.

Yesterday, the Department of Justice announced a settlement between Genotox Laboratories (“Genotox”) and the Department of Justice involving allegations that Genotox paid volume based commissions to third party marketers in violation of the Anti-Kickback Statute (“AKS”) and submitted claims to the federal health care programs for unnecessary drug tests.

Recently, the DOJ announced that Biogen agreed to pay $900 Million to settle a declined qui tam case. Relator and former Biogen employee, Michael Bawduniak, alleged that Biogen paid kickbacks to physicians in the form of speaker honoraria, speaker training fees, consulting fees and meals, to induce them to prescribe certain drugs in violation of the Anti-Kickback Statute. 

Today, the DOJ announced a settlement with Philips RS North America LLC, formerly known as Respironics Inc., related to allegations of that it paid illegal kickbacks to durable medical equipment (“DME”) suppliers. Notably, the DOJ alleges that Respironics Inc. (“Respironics”) gave DME suppliers data related to prescribing physicians to assist the suppliers in marketing to physicians. The federal Anti-Kickback Statute (“AKS”) prohibits a person or entity from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or reward the purchase of any item that may be reimbursed under the federal healthcare programs.  Here, DOJ alleges that Respironics caused certain DME suppliers to submit false claims for medical equipment that were false because of its inducements to the DME suppliers in the form of free data.

Another day, another kickback testing settlement: Last week, the DOJ announced a settlement between the United States and two clinical laboratories located in Mississippi and Texas (and their owners). Under the Settlement, the labs and their individual owners agreed to pay $5.7 Million to resolve kickback allegations. The DOJ alleges that the labs entered into sham agreements with marketers to provide various services at an hourly rate, when, in reality, the labs paid the marketers a percentage of revenue, including Medicare reimbursement, in return for the samples.  Most practitioners in this space know that kickbacks can show up in a number of different forms. But, often liability/exposure turns on the intended purpose of the underlying agreements. What is the spirit of the agreement in question? At times, companies want to rely on papered agreements, when, in fact, those sham agreements often serve as evidence of remuneration.

The Department of Justice continues to demonstrate its commitment to holding both testing facilities and hospitals accountable for kickback schemes involving laboratory testing.  In the alleged kickback scheme referenced in the link below, DOJ alleges that the relevant hospitals paid a portion of their laboratory profits to recruiters who then paid a portion of the profits to the physicians. DOJ’s complaint sets forth allegations against the laboratory executives and employees, hospitals and, now, the physicians involved. This suit demonstrates DOJ's commitment to targeting individual corporate bad actors when the evidence supports those allegations. 

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