BioReference Laboratories and Parent Company Agree to Pay $9.85 Million to Resolve Allegations of Illegal Referring Physician Payments Under the False Claims Act | Takeover bid

BioReference Health LLC, formerly known as BioReference Laboratories, Inc., (BioReference), and OPKO Health, Inc. (OPKO) have agreed to pay $9.85 million to resolve alleged violations of the False Claims Act resulting the payment by BioReference of above-market rents to landlords of physicians for office space in order to induce such physicians to refer to BioReference. BioReference, a subsidiary of OPKO, is headquartered in New Jersey and is one of the largest clinical laboratories in the United States.

“The integrity of federal health care programs depends on providers making decisions based on the best interests of their patients,” said Senior Assistant Deputy Attorney General Brian M. Boynton, Chief of the Civil Division of the Department of Justice. “The Department of Justice and its partner agencies are committed to enforcing laws prohibiting illegal financial arrangements that could distort health care decision-making and increase costs for federal health care programs. and patients.

BioReference and OPKO have agreed to pay $9.85 million to resolve allegations that, between January 2013 and March 2021, BioReference paid rent to physicians and physician groups for renting office space for amounts exceeding fair market value, in violation of the Physician Autonomy Act. -Law on dismissal and anti-bribery law. The Physician Self-Referral Act, commonly referred to as the Stark Act, prohibits a health care provider from billing for certain services recommended by physicians with whom it has a financial relationship unless that relationship satisfies the one of the legal or regulatory exceptions provided for by law. Anti-kickback law prohibits offering or paying compensation to induce referrals for items or services covered by Medicare, Medicaid, and certain other federally funded programs. The Stark Act and the Anti-Kickback Act both seek to ensure that medical judgments are not compromised by improper financial inducements.

As part of today’s settlement, BioReference admitted to renting office space from specified medical offices for Patient Service Centers (PSCs), where patients could have their blood samples taken. When calculating payments under certain CSP rental agreements, BioReference inaccurately measured the amount of space that BioReference would use exclusively and included a disproportionate amount of common space. BioReference analyzed referrals from nearby healthcare providers – including physician-landlords – when deciding whether to open, maintain, or close CSPs. Following OPKO’s acquisition of BioReference, the companies conducted several internal audits which showed that payments to specified physician-landlords exceeded fair market value. BioReference has not reported or reimbursed any overpayments to federal health care programs.

“Medical decisions by physicians should be based on what is best for each patient, not a physician’s personal financial interest,” said U.S. Attorney Rachael S. Rollins for the District of Massachusetts. “When companies violate federal health care laws that are meant to protect patients, health care costs for hard-working people go up. We will continue to find fraud and use the False Claims Act to compel companies that break the law to reimburse the taxpayers they defrauded and pay a financial price for their misconduct.

As part of the False Claims Act regulations, BioReference has also entered into a “Corporate Integrity Agreement” with the Department of Health and Human Services, Office of Inspector General (HHS-OIG).

“This settlement is a warning to companies that believe they can increase their profits by entering into inappropriate financial arrangements with referring physicians,” said Special Agent in Charge Phillip M. Coyne of HHS-OIG. “Together with our law enforcement partners, we will continue to crack down on such deals, which aim to undermine impartial medical judgment, drive up health care costs and corrode public confidence in the health system.”

“Labs that conspire to enrich their business through healthcare fraud — for example, by paying bribes — drive up healthcare costs for everyone,” the special agent said. in charge Joseph R. Bonavolonta of the FBI division in Boston. “This settlement shows how seriously the FBI takes its responsibility to eliminate them, and we would also like to thank the whistleblower in this case for helping us ensure that these entities are held accountable.”

“When healthcare companies pay illegal compensation to physicians and submit false claims for inappropriate referrals, they compromise the integrity of TRICARE and impose an unnecessary financial burden on the program,” said Special Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service. , the law enforcement arm of the Department of Defense’s Office of Inspector General. “The settlement agreement announced today demonstrates our continued commitment to working with our law enforcement partners to investigate healthcare fraud and protect TRICARE, the healthcare system for members and their dependents.”

The settlement resolves allegations originally made in a lawsuit brought by Jean Marie Crowley, a former employee of BioReference and OPKO, under the who tam or the whistleblower provisions of the False Claims Act. Under these provisions, a private party can sue on behalf of the government and participate in any recovery. Ms. Crowley will receive approximately $1.7 million as her share of the recovery in this case. The who tam the case is subtitled United States ex rel. Crowley v. BioReference Laboratories, Inc. and OPKO Health, Inc.., Civil Action No. 19-CV-10981-WGY (D. Mass.). As part of the settlement, the defendants will also pay the Commonwealth of Massachusetts $141,041 and the State of Connecticut $5,001 to resolve alleged violations of their respective states’ False Claims Acts.

The investigation was conducted by the Civil Division, Commercial Litigation Branch, Fraud Section, of the Department of Justice and the U.S. Attorney’s Office for the District of Massachusetts with assistance from HHS-OIG and the Office of the Attorney General, the Department of Defense’s Office of Inspector General and the FBI.

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

The claims resolved by the settlement are allegations only and no liability has been determined.

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