Oncology Practice and Lab Settle $4 Million Kickback Case with US Government

Core Concepts

An oncology practice and a diagnostic lab agreed to pay a combined $4 million to settle allegations of an unlawful kickback scheme involving referrals for bone marrow biopsies.

Abstract

The content describes a settlement between the US Department of Justice (DOJ) and an oncology practice, Oncology San Antonio, PA, and a diagnostic reference laboratory, CorePath Laboratories, PA. The DOJ alleged that the two entities had entered an unlawful kickback arrangement. Specifically: CorePath Laboratories conducted in-office bone marrow biopsies at Oncology San Antonio practice locations and performed diagnostic testing on the samples. CorePath Laboratories agreed to pay $115 for each biopsy referred by Oncology San Antonio physicians. These biopsy payments were allegedly paid to the private practices of three physicians at Oncology San Antonio. The DOJ claimed that the payments for referring biopsies constituted illegal kickbacks under the Anti-Kickback Statute. In the settlement, Oncology San Antonio agreed to pay $1.3 million, and CorePath Laboratories agreed to pay nearly $2.75 million plus accrued interest. The settlement also resolved allegations that a physician affiliated with Oncology San Antonio, Jayasree Rao, MD, provided unnecessary tests, services, and treatments to patients covered by federal healthcare programs. Oncology San Antonio stated that the decision to settle was due to the cost and distraction of prolonged litigation, despite being confident they would have prevailed. They alleged that the contract for bone marrow biopsies was negotiated and signed by a former non-physician officer without the input of Oncology San Antonio physicians.

Stats

Oncology San Antonio agreed to pay $1.3 million in the settlement. CorePath Laboratories agreed to pay nearly $2.75 million plus accrued interest in the settlement.

Quotes

"Violations of the Anti-Kickback Statute involving oncology services can waste scarce federal healthcare program funds and corrupt the medical decision-making process." "The decision to settle was an extremely difficult one because Oncology San Antonio was confident that it would have prevailed in any action."

Key Insights Distilled From

Oncology Practice and Lab to Pay $4 Million in Kickback Case

by Patricia Mck... at www.medscape.com 04-05-2024

https://www.medscape.com/viewarticle/oncology-practice-and-lab-pay-4-million-kickback-case-2024a10006ha

Deeper Inquiries

What were the specific factors that led Oncology San Antonio to decide to settle the case, despite their confidence in prevailing?

Oncology San Antonio decided to settle the case primarily due to the cost and distraction of prolonged litigation. Even though they were confident in their ability to prevail in any legal action, the practice opted for settlement to avoid the financial burden and time-consuming nature of a protracted legal battle. The decision to settle was a strategic choice made to mitigate the potential negative impact on the practice's operations and reputation.

How common are kickback arrangements between healthcare providers and diagnostic labs, and what are the broader implications for the healthcare system?

Kickback arrangements between healthcare providers and diagnostic labs are unfortunately not uncommon in the healthcare industry. These arrangements can lead to increased healthcare costs, compromised patient care, and violations of laws such as the Anti-Kickback Statute. The broader implications for the healthcare system include the erosion of trust, potential harm to patients due to unnecessary tests or treatments, and the misuse of taxpayer-funded healthcare programs. Such practices can distort medical decision-making, inflate healthcare expenses, and undermine the integrity of the healthcare system.

How can the government and regulatory bodies better prevent and detect such fraudulent schemes in the future to protect taxpayer-funded healthcare programs?

To prevent and detect fraudulent schemes like kickback arrangements in the future, government and regulatory bodies can implement several measures. These include enhancing oversight and enforcement of existing laws such as the Anti-Kickback Statute, increasing transparency in financial relationships between healthcare providers and labs, conducting regular audits and investigations, encouraging whistleblowers to report misconduct, and imposing strict penalties for violations. Additionally, promoting a culture of compliance, providing education and training on healthcare fraud laws, and leveraging technology for data analysis and monitoring can help safeguard taxpayer-funded healthcare programs from abuse and fraud.