Madison, Wisconsin – United States Attorney Scott C. Blader for Wisconsin’s Western District, reported on 11th January 2021 that AutoGenomics, Inc. has consented to reimburse the United States government 2,538,000 U.S. dollars to settle allegations that it breached the False Claims Statute and Anti-Kickback Act by taking part in a conspiracy to bill the Medicare program for molecular genetic screening conducted on nursing home patients that were persuaded by the reimbursement of remuneration (which comprises cash or anything of value), or an illicit kickback, for those genetic tests’ referral.
AutoGenomics, situated within Carlsbad, California, previously owned and controlled a lab doing business as PersonalizeDx Labs (jointly AutoGenomics). In April 2013 and March 2015, AutoGenomics signed agreements with a health care marketing firm based in California to use AutoGenomic’s lab services for genetic tests ordered by the health care marketing firm’s customers. According to these agreements, AutoGenomics reimbursed the health care marketing firm a specified monetary kickback for every test that was paid by the Medicare program, but only if the Medicare program reimbursed the claim. Pursuant to these agreements, the sum of the kickback was determined either on a fixed or percentage amount of the Medicare program’s payment for every genetic test. As clarified below, such agreements breach federal law.
Prestige Administrative Services, LLC, operating business as Prestige Healthcare, owned and controlled residential nursing homes within Wisconsin and other additional states. Between 2014 and 2015, Prestige Healthcare gave the health care marketing firm info to identify its Medicare program patients and gave access to its patients to acquire buccal cell samples and then submitted the samples to AutoGenomics for the molecular genetic screening to be carried out and claims submitted to the Medicare program for reimbursement. Prestige Healthcare, while not admitting responsibility, prior resolved its purported role and participation in the conduct for approximately 1 million U.S. dollars for triggering the submission of medically unneeded genetic tests.
As per this settlement, the United States purported that AutoGenomics’s submission of genetic screening claims to the Medicare program that were predicated by the reimbursement of kickbacks mediated in the agreements breached the Anti-Kickback Act and the False Claims Statute because a claim for payment that is the outcome of a kickback is a false and fraudulent claim. The United States also purported that the fraudulent and false claims settled by the settlement were for the reimbursement of kickbacks for the submission of lab genetic screening carried out for patients living at seventy-six nursing homes, at both Prestige Healthcare and non-Prestige Healthcare owned and controlled facilities.
United States Attorney Scott C. Blader for Wisconsin’s Western District stated that the purpose of the Anti-Kickback Act is to safeguard federal health beneficiaries and the Medicare program from the influence of money or other valuable things for the referral of unneeded genetic testing, and it guards against fraud, waste, and abuse of the nation’s federal health care system. U.S. Attorney Blader further stated that the state surveyors offered crucial support in identifying the facts that resulted in their federal investigation and this settlement agreement. U.S. Attorney Blader concluded his statement by saying that this settlement agreement is a good example of their state and federal law enforcement partners working jointly to discover the Medicare program fraud and exploiting the elderly for financial gain.
Special Agent Lamont Pugh III in Charge of the Chicago Region HHS-OIG (the United States Health & Human Services Department – Office of Inspector General) stated that the reimbursement of kickbacks is a corrupt practice that improperly influences a person or entity’s capacity to make unprejudiced decisions which are of certain concern in the health care field. Special Agent Lamont Pugh III further stated that kickbacks could lead to overutilization of diagnostic screening and extra services that ultimately result in increasing program expenses and waste valuable taxpayer funds.
The accusation settled by the resolution are merely allegations; there has been no determination of responsibility.
The settlement resulted from a joint inquiry carried out by the Chicago Region HHS-OIG (United States Health & Human Services Department – Office of Inspector General) and the Office of the United States Attorney for Wisconsin’s Western District. The purported factual basis for the inquiry was uncovered during survey work carried out by professionals at the Department of Health Services Division of Quality Assurance in Wisconsin. The United States Assistant Attorney Leslie K. Herje handled the prosecution for this matter.
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