A Framingham, Massachusetts company agreed in November 2019 to pay more than $26 million as part of a settlement for alleged healthcare fraud. From 2015 to 2017, Laboratory Boston Heart Diagnostics Corporation (Boston Heart) purportedly conspired with others in a massive, complex scheme to pay doctors kickbacks for referring patients for lab testing.
Boston Heart allegedly agreed to provide lab testing services to small Texas hospitals in exchange for per-test payments. To generate more referrals and income, the company
purportedly coordinated with the hospitals’ independent marketers to set up management service organizations (MSOs), which then allegedly paid kickbacks (disguised as investment returns) to referring physicians.
It was also alleged that Boston Heart helped the MSOs identify physicians and participated in sales pitches offering physicians kickbacks for referrals. (Nothing suspicious here… move along.) As a result, physicians referred patients to the Texas Hospitals and Boston Heart for lab testing billed to Medicare, Medicaid, and TRICARE. The settlement also resolved allegations that Boston Heart conspired to submit outpatient lab testing claims for patients who were not hospital patients, to receive higher reimbursements from these federal payers.
C.J. Porter, Special Agent in Charge for the Office of the Inspector General at the U.S. Department of Health and Human Services (OIG-HHS), noted, “Schemes designed to defraud federal healthcare programs undermine our healthcare system by driving up medical costs, wasting taxpayer dollars, and often harming patients.” Along with OIG-HHS, the case was investigated by the U.S. Department of Justice; U.S. Attorney’s Offices for the Eastern District of Texas, District of Columbia, and Eastern District of California; and the Defense Criminal Investigative Service. Because of the settlement, the claims are considered allegations only and no determination of liability for healthcare fraud has been made for the Massachusetts company.
Today’s Fraud of the Day comes from a news release from the United States Department of Justice, “Laboratory to Pay $26.67 Million to Settle False Claims Act Allegations of Illegal Inducements to Referring Physicians,” published Nov. 26, 2019.
Laboratory Boston Heart Diagnostics Corporation (Boston Heart), of Framingham, Massachusetts, has agreed to pay $26.67 million to resolve False Claims Act allegations involving payments for patient referrals in violation of the Anti-Kickback Statute and the Stark Law, as well as claims otherwise improperly billed to federal healthcare programs for laboratory testing, the Department of Justice announced today.
The settlement announced today resolves allegations that Boston Heart conspired with others to pay doctors kickbacks disguised as investment returns. From 2015 to 2017, Boston Heart allegedly agreed to provide laboratory testing services to small Texas hospitals in exchange for per-test payments. To generate more referrals for the hospitals and more money for itself, Boston Heart allegedly coordinated with the hospitals’ independent marketers, who set up companies known as management service organizations (MSOs), to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals. Boston Heart allegedly helped the MSOs identify physician targets, referred interested physicians to the MSOs to secure their business, and participated with the MSOs in sales pitches to offer physicians money in exchange for referrals. As a result, physicians allegedly referred patients to the Texas hospitals and Boston Heart for laboratory tests performed by Boston Heart, which were then billed to Medicare, Medicaid, and TRICARE.