DOJ settles case for $43 million

Posted on February 11, 2021

(This blog was written by whistleblower investigator Lee Walters.)

The Department of Justice and the U.S. Attorney’s Office for the Western District of North Carolina announced this week that they had come to a settlement totaling approximately $43 million with Genova Diagnostics, Inc., a clinical laboratory located in Asheville, North Carolina.

The case was initiated based on a qui tam, or whistleblower case, under the provisions of the False Claims Act. The allegations included that:

a) the Defendant company was submitting claims to Medicare, TRICARE, and federal  employee health programs for its IgG allergen, NutrEval and GI Effects lab tests that   were not medically necessary

b) the Defendant company engaged in improper billing techniques

c) the Defendant company paid phlebotomy vendors that violated the physician’s self-referral provisions more commonly known as the Stark Law.

Under the settlement, Genova agreed to pay $17 million through the surrender of claims that had been held in suspension by Medicare and TRICARE, plus an additional $26 million if certain financial contingencies occur over the next five years, for a total potential repayment of up to $43 million. Our team represented three brave whistleblowers in a case where similar financial contingencies were put into place by the government in United States ex rel. Van Raalte, et al. v. Healogics, Inc.

As part of the settlement, Genova also entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. CIA’s are normally a standard requirement with most settlements with the government and spell out a long laundry list of requirements a defendant must adhere to. Our team, in the past, has seen companies breach these CIA’s which can be grounds for filing additional qui tam actions against them.

Dr. Darryl Landis was the whistleblower, or what’s legally referred to as the Relator, in this matter and will receive a payment of up to approximately $6 million for bringing the case forward. The False Claims Act permits private citizens to bring a lawsuit on behalf of the United States and share in any recovery.

If you think you may have observed fraudulent billing activity on the part of your employer, please reach out to us and let’s have a conversation to see how we can help you.