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Genova Diagnostics to pay up to $43 million to resolve allegations of medically unnecessary tests

Christian Fernsby ▼ | April 28, 2020
Genova Diagnostics Inc., a clinical laboratory services company based in Asheville, North Carolina, has agreed to pay up to approximately $43 million to resolve allegations that it violated the False Claims Act, including claims that it billed for medically unnecessary lab tests, the Department of Justice announced.
Allegations   Genova Diagnostics
The settlement resolves allegations that Genova: (a) improperly submitted claims to Medicare, TRICARE, and the federal employee health program for its IgG allergen, NutrEval and GI Effects lab test profiles because the tests were not medically necessary, (b) engaged in improper billing techniques, and (c) paid compensation to three phlebotomy vendors that violated the physician self-referral prohibition commonly known as the Stark Law.

Topics: Genova Diagnostics

The Stark Law is intended to ensure that physician referrals are determined by the medical needs of patients and not the financial interests of physicians.

Under the settlement, Genova has agreed to pay approximately $17 million, through the surrender of claim funds held in suspension by Medicare and TRICARE, plus up to an additional $26 million if certain financial contingencies occur within the next five years, for a total potential payment

f up to $43 million. Contemporaneous with the civil settlement, Genova entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General.

The CIA requires, among other things, that Genova establish and maintain a compliance program with specific requirements and that it engage an independent review organization.

The agreement resolves allegations brought by Darryl Landis under the qui tam, or whistleblower, provisions of the False Claims Act.

The False Claims Act permits private citizens to bring a lawsuit on behalf of the United States for fraud and to share in any recovery.

The settlement provides for a payment of up to approximately $6 million to Dr. Landis.