BOSTON (AP) — A national medical testing company has agreed to pay $16 million to resolve allegations that it submitted claims for payment for medically unnecessary tests to Medicare and other federal health care programs, federal prosecutors said Wednesday.
Under terms of the settlement, Inform Diagnostics Inc. acknowledged that from 2013 to 2018 it routinely conducted additional tests on biopsy specimens prior to a pathologist’s review and without a determination on whether additional tests were medically necessary, the U.S. attorney's office in Boston said.
The company submitted these tests for payment by federal health care programs, prosecutors said.
Inform Diagnostics, formerly Miraca Life Sciences Inc., is based in Irving, Texas, and has lab space in Phoenix and Needham, Massachusetts. Fulgent Genetics agreed to acquire the company in April.
The company said it provides services to about 1,300 clients who represent more than 2,700 physicians.
Inform in a statement said it changed the practices that led to to the settlement four years ago.
“Since that time, Inform has put stringent protocols in place to avoid a reoccurrence of this type of coding procedure," the company said.
The original False Claims Act allegations were brought in a lawsuit filed by a private whistleblower who, under legal provisions, can file an action on behalf of the government and share in any financial recovery — in this case, 17%.
“Laboratories that bill for medically unnecessary tests drain funds from Medicare and other federally funded health care programs,” U.S. Attorney Rachael Rollins said. “Prioritizing profit over complying with the law wastes hard-earned taxpayer dollars."
