UTC Laboratories genetic testing to pay $42.6 million to end charges of unnecessary pharmacogentic testing and kickbacks for lab referrals

 UTC Laboratories, Inc. (RenRX) has agreed to pay $41.6 million, and its three principals, Tarun Jolly, M.D., Patrick Ridgeway, and Barry Griffith, have agreed to pay $1 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for pharmacogenetic testing and for furnishing and billing for tests that were not medically necessary.  RenRX, a laboratory company headquartered in New Orleans, Louisiana, also agreed to a twenty-five year period of exclusion from participation in any federal health care program.

The government alleged that between 2013 and 2017, UTC and its principals offered and paid remuneration to physicians to induce the ordering of pharmacogenetic tests, purportedly in return for their participation in a clinical trial known as the Diagnosing Adverse Drug Reactions Registry (DART), clinical trial identifier NCT01970709.  The government also alleged that UTC and its principals offered and paid remuneration, including sales commissions, to entities and individuals as part of the scheme, and furnished pharmacogenetic tests that were not medically necessary and billed the Medicare program.

“The payment of cash and thinly-disguised referral bribes, as contended by the government, resulted in a more than $42 million dollar resolution in this case, said Special Agent in Charge CJ Porter of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Additionally, my agency barred RenRX from receiving any payments from federal health programs for a full 25 years.  Genetic testing scams are becoming all too common. OIG has a genetic testing fraud alert here.”

The settlement announced today resolves allegations in six lawsuits pending in the United States District Court for the Eastern District of Louisiana:  United States ex rel. Bergeron v. UTC Labs., LLC, et al., No. 16-15440 (E.D. La.); United States ex rel. McNeil v. Tarun Jolly, UTC Labs., LLC, et al., No. 14-2247 (E.D. La.); United States ex rel. Green &  Lawson v. UTC Labs., LLC d/b/a Renaissance RX & Stone Surgical, LLC, No. 15-297 (E.D. La.); United States ex rel. Church v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-877 (E.D. La.); United States ex rel. Outerbridge v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-1445 (E.D. La.).  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in these cases.

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services (HHS), at 800-HHS-TIPS (800-447-8477).

The investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Louisiana and the Department of Justice’s Civil Division, in conjunction with the HHS-OIG and the FBI.

There were five whistleblowers.  One was represented by the firm Baum Hedlund Aristei & Goldman allegations of healthcare fraud to the government’s attention. The whistleblowers will share a reward of roughly $9 million for blowing the whistle on UTC Laboratories and its principals named in litigation.

The cases are captioned United States ex rel. Bergeron v. UTC Labs., et al., No. 16-15440 (E.D. La.); United States ex rel. Treci McNeil v. Tarun Jolly, UTC Labs., LLC, et al., No. 14-2247 (E.D. La.); United States ex rel. Green & Lawson v. UTC Labs., LLC, et al., No. 15-297 (E.D. La.); United States ex rel. Church v. UTC Labs., LLC, d/b/a Renaissance RX, No. 15-877 (E.D. La.); and United States ex rel. Outerbridge v. UTC Labs., LLC, d/b/a Renaissance RX and Tarun Jolly, No. 15-1445 (E.D. La.).

Jeffrey Newman and his firm represent whistleblowers nationwide. He can be reached at jeffrey.newman1@gmail.com or ar 617-823-3217.