Laboratory company pays $17million settling False Claims Act case alleging fraudulently billing Medicare for medically unnecessary feces tests

Genova Diagnostics, A laboratory company will pay the government $10 Million for allegedly tested patients’ feces unnecessarily and billed the federal government, leading to charges of Medicare fraud. Now, they’ll pay between $17-43 million to settle those allegations and others, according to the Department of Justice.  A lawsuit filed in federal court alleged Genova improperly submitted claims to Medicare, TRICARE (the government health care program for service members and their families) and the federal employee health program for tests that weren’t medically necessary.

The suit highlighted three tests — the NutrEval and GI Effects Lab Test, which both analyze stool samples, and IgG allergen, a food sensitivity test that is the subject of considerable debate. The suit also alleged that Genova  engaged in improper billing techniques and referred patients to three phlebotomy vendors to which the company had improper financial ties, in violation of the Stark Law.

Under the settlement, Genova will pay approximately $17 million, the DOJ release said— through the “surrender of claim funds held in suspension by Medicare and TRICARE,” meaning Genova won’t be reimbursed for other services rendered to Medicare and TRICARE patients.

Genova will owe “an additional $26 million if certain financial contingencies occur within the next five years,” the DOJ said, and will be subject to independent review for the next five years as part of an agreement with the Department of Health and Human Services.

Under the False Claims Act’s, private citizens and non-governmental organizations are able to file suit on behalf of the government. According to the National Whistleblower Center, whistleblowers are awarded a mandatory reward of between 15-30% of any money the federal government recovers.

Jeffrey Newman represents whistleblowers nationwide including whistleblowers who report healthcare fraud including Medicare, Medicaid and TriCare fraud. He can be reached at 617-823-3217 or at Jeffrey.Newman1@gmail.com