Clinical Lab Owner to Pay $13M to Settle False Claims Act Allegations, Faces Charges Relating to Sabotaging Competitor’s Business

A New Jersey-based clinical laboratory and its owner and CEO Eric Leykin of New York have agreed to pay $13 million to settle False Claims Act allegations involving the payment of illegal kickbacks and medically unnecessary lab testing.

According to the settlement agreement, Leykin, owner and CEO of RDx Bioscience, perpetuated a healthcare kickback scheme that took place between 2017 and 2023 to get healthcare providers, through the use of marketers, to refer patients to his clinic.

Types of Kickbacks Alleged

The settlement resolves false claims act allegations relating to five types of kickbacks: commissions based on the volume and value of referrals; paid management services fees disguised as investment returns; paid providers consulting or medical director fees intended to induce referrals; paid kickbacks to substance abuse recovery centers in return for referrals; paid specimen collection fees to the staff members of referring healthcare providers to induce those providers to order RDx laboratory testing.

• From 2018 to 2022, RDx and Leykin allegedly paid commissions based on the volume and value of Medicare and Medicaid referrals to independent contractor marketers to arrange for and recommend that healthcare providers order RDx laboratory tests in violation of the Anti-Kickback Statue. The marketers are identified in the agreement as BeauMed Consultants LLC, Corum Group LLC, Nocher Enterprises Inc., OC Genetic Consultants Inc., Ralston Health Group Inc., and Seaworthy Recovery Services Inc.
• From 2018 to 2022, RDx marketer Corum Group LLC allegedly paid healthcare providers thousands of dollars in purported management services organization (MSO) payments, which were disguised as investment returns, but were offered to induce the providers to order RDx laboratory tests. The MSOs are identified in the agreement as Alari Group LLC and Avior Group LLC. The providers are identified as Shamim Badiyan, M.D., Paul Bierig, M.D., Imran Chishti, M.D., Stanley Librach, M.D., Vijesh Patel, M.D., and Carmen Wong, M.D. In December 2022, Dr. Patel and his office manager and wife Laju Patel, both of Port Neches, Texas, agreed to pay $422,789 agreed to settle those False Claims Act allegations. In July 2023, Dr. Chishti and his medical practice, C Care, of Chesterfield, Missouri; agreed to pay $125,504 and Badiyan of Frisco, Texas agreed to pay $182,676 to settle those False Claims Act allegations.
• From 2017 to 2023, RDx marketers BeauMed Consultants LLC and Ralston Health Group Inc. allegedly paid thousands of dollars to healthcare providers that were disguised as consulting or medical director fees, but were offered to induce orders, among other things, for RDx laboratory tests. The providers are identified in the settlement agreement as Dr. Daniel Eidman, Dr. Regina Pondexter Hunter, and Dr. Moustafa Moustafa. In September 2023, Dr. Moustafa and his medical practice, South Carolina Nephrology and Hypertension Center Inc., of Orangeburg and Bamberg, South Carolina, agreed to pay $585,540 to resolve False Claims Act allegations.
• From 2019 to 2020, RDx marketer Seaworthy Recovery Services Inc. allegedly paid thousands of dollars in kickbacks to one or more principals of certain substance abuse recovery centers to induce their referrals to RDx for laboratory testing. Those recovery centers are identified as Beaches Recovery Services LLC and Tides Edge Recovery Services LLC.
• RDx and Leykin allegedly paid specimen collection fees to the staff members of referring healthcare providers to induce those providers to order RDx laboratory testing. The settlement resolves allegations that RDx and Leykin billed or caused Medicare and Medicaid to be billed for the tests despite paying or knowing of these kickbacks. In addition, from 2017 to 2023, RDx and Leykin allegedly submitted or caused false claims to be submitted to Medicare and Medicaid for laboratory tests that were not reasonable and necessary; not covered because they were identical orders of urine drug testing panels for all patients within a clinician’s practice without individualized decision-making; or not covered because they were improperly duplicative of other claims for urine drug testing for the same date of service, the same patient, and the same drugs.

Settlement Money Distribution

Of the money to be paid $10,315,023 will go to settle the False Claims Act allegations involving illegal kickbacks and medically unnecessary laboratory testing. In addition, RDx and Leykin will pay another $2,934,977 to New Jersey, which jointly funded claims paid by the New Jersey Medicaid program. In addition RDx and Leykin have agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged schemes.

The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

Even More Troubles for Leykin

Leykin’s trouble with the law doesn’t appear to have ended with this settlement agreement. Last May, he was indicted in New Jersey on charges of wire fraud in a case involving sabotage against a competitor.

The indictment alleges on June 30, 2022, Leykin bought and activated a prepaid mobile phone and called an employee of a competiting clinical reference posing as a technician with a vendor that the business used to service its laboratory equipment. On that false pretense, Leykin arranged with the victim business’ employee to come to the business on the following day, supposedly to service the business’ laboratory equipment. On July 1, 2022, Leykin went to the business, entered the premises fraudulently posing as a vendor technician, and proceeded to destroy a significant amount of the business’ laboratory and computer equipment. Leykin also stole multiple computer hard drives. He has since pleaded not guilty.

If convicted, the wire fraud count carries a maximum potential penalty of 20 years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.

How We Can Help

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than three decades. The firm conducts confidential defense investigations and will take you through the process to reduce or eliminate criminal, civil, licensure and administrative liability. In addition, our firm represents healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims, among others. For more information, contact us at 305-358-4500 or email info@vitalehealthlaw.com.