CHARLESTON, S.C., May 24, 2018 /PRNewswire/ -- A federal judge in South Carolina issuedan order of judgment on Wednesday that imposes civil damages and penalties totaling more than $114 million on the former CEO of a medical testing lab and to two owners of the lab's marketing partner for violations of the
Judge Richard Gergel ordered the defendants – Tonya Mallory, the former CEO of Health Diagnostic Laboratory (HDL) in Richmond, VA, and Floyd Calhoun Dent III and Robert Bradford Johnson, who are the owners of BlueWave Healthcare Consultants Inc. (BlueWave), an Alabama marketing company – to 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.
The whistleblowers and government alleged that the three executives conspired to knowingly and willfully pay kickbacks to doctors in the form of unwarranted processing and handling fees for blood draws and testing referrals, incentivizing doctors to order often unnecessary, expensive cardiovascular blood tests for federally insured patients.
Phillips & Cohen partner Peter Chatfield commended Dr. Mayes and the other whistleblowers for their work in making the cases against the three defendants possible: "Dr. Mayes's strong sense of ethics compelled him to speak up, at a cost to his relationships with other doctors who had been enriching themselves by accepting the unlawful payments," Chatfield said. "Dr. Mayes brought this case out of concern for Medicare patients, knowing that healthcare fraud can drive up Medicare premiums and Medicare costs, putting patients at risk of cuts in Medicare-covered services."
The scheme involved paying doctors illegitimate $20 processing and handling frees for ordering the unnecessary tests. HDL submitted 35,074 false claims to the government as part of this scheme. BlueWave owners Dent and Johnson were additionally found liable in a related kickback scheme, which paid 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 scheme resulted in the submission by Singulex of another 3,813 false claims to federally insured healthcare programs that cost the government $467,935. Dent and Johnson we assessed more than $3 million more in damages and penalties for this scheme.
The federal jury assessed the defendants as owing federal government single damages totaling in excess of $17 million. Under the False Claims Acts, those damages are automatically trebled, meaning the total combined liability of the defendants amounts to $51.2 million, plus the approximately $78.5 million in civil penalties announced on Wednesday. The amount of the penalties was calculated by imposing the minimum $5,000 False Claims Act penalty assessable at the time of the earliest misconduct to just 11,600 of nearly 39,000 false blood lab claims for reimbursement that the defendants were found by the jury to have caused the United States government to pay.
Working together, the whistleblowers from all three qui tam cases and their respective counsel helped the government investigate their overlapping claims, reach settlements with other defendants, and ultimately bring them trial. The whistleblowers also participated in additional cases on behalf of the government, resulting in further fines against HDL, Singulex, and a Quest Lab subsidiary.
More information about this case and the jury trial is available on the Phillips & Cohen website.
View original content:http://www.prnewswire.com/news-releases/114m-penalty-issued-in-medicare-fraud-case-brought-by-whistleblowers-300654755.html
SOURCE Phillips & Cohen LLP
Subscribe to our Free Newsletters!
Bad eating habits will affect your health as well as your skin and make you look older than your ...
A lump in the armpit can be due to a benign infection, allergy or fatty tissue growth. It is ...
Fennel seeds are a must-have in almost every Indian kitchen due to its health quotient. Here are a ...View All