Clinical Lab Company Settles Healthcare Fraud Case Alleging Violations of Anti-kickback Statute

A New Jersey biopharmaceutical research and clinical laboratory testing company accused of paying kickbacks to third-party marketers has agreed to pay the federal government nearly $5.4 million to settle the anti-kickback statute violations and healthcare fraud case against it.

Whistleblower Case

The False Claims Act complaint was filed under seal by Sunil Wadhwa and Ken Newton, co-founders of Financial Halo LLC/MedXPrime, a former third-party marketer for Admera Health LLC, the company charged in the case.

The whistleblower lawsuit alleged that between Sept. 1, 2014, through May 21, 2021, Admera paid commissions to independent contractor marketers in return for recommending or arranging for the ordering of genetic testing services in violation of the Anti-Kickback statute.

The anti-kickback statute prohibits offering or paying remuneration in return for arranging for or recommending items or services covered by Medicare and other federally funded programs.

A kickback is, in essence, a bribe in that a commission is paid to the bribe-taker in exchange for services rendered. Such conduct undermines the integrity of medical decision-making and potentially puts patient care at risk.

In addition, Admera will pay another $147,851 to individual states for claims paid to Admera by the individual state Medicaid programs.

The Settlement Agreement

As part of the settlement agreement, Admera admitted that it made millions of dollars of commission payments, in violation of the anti-kickback statute, to independent-contractor marketers to get them to arrange for or recommend that healthcare providers order and refer clinical laboratory services to Admera.

These included genetic tests, that were reimbursable by Medicare and/or Medicaid, that it paid marketers through arrangements that considered the volume and value of those referrals.

The Payment Deals

In some cases, marketers were paid between 33 and 50 percent of the Medicare reimbursements that it received for genetic tests that they arranged for or recommended. In other instances, Admera was accused of paying marketers a flat fee for each genetic test they referred to Admera. Both payment arrangements considered the volume and value of the referrals which was paid to them by Medicare.

According to the settlement agreement, Admera was informed that the commission payments to independent-contractor marketers did not comply with the Anti-Kickback Statute but continued to enter into contracts with them and approve millions of dollars in commission payments to them to arrange for and recommend that healthcare providers order Admera’s genetic tests.

In fact, according to the agreement, the company didn’t terminate its contracts with the marketers until November 2020, when the Centers for Medicare & Medicaid (CMS) stopped Medicare payments to the company.

Whistleblowers Paid

The False Claims Act’s qui tam provisions allow private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers can receive between 15 percent and 30 percent of the government’s recovery. The whistleblowers in this case will receive $862,343 of the proceeds from the settlement.

Admera continues to exist, but only as a research services provider.

This settlement should be a reminder to healthcare providers about the consequences of violating the Anti-Kickback Statute. It’s also an example of how whistleblowers can ensure that healthcare companies obey the law, as well as save taxpayer dollars and ensure the safety of patients enrolled in government-funded healthcare programs such as Medicare, Medicaid and TRICARE.

How We Can Help

The Health Law Offices of Anthony C. Vitale represents healthcare professionals in state and federal court who are charged with fraudulent billing, illegal kickbacks, Medicare and Medicaid fraud, and false claims, among others. Whether you are a whistleblower or the target of a whistleblower action, our extensive experience and specialized knowledge will ensure your case is handled with exceptional skill and care. For more information, contact us at 305-358-4500 or email info@vitalehealthlaw.com