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Texas Pathology Lab Pays $63.5M to Settle False Claims, Kickback Allegations

Analysis  |  By John Commins  
   January 31, 2019

Miraca Life Sciences allegedly subsidized physicians' EHR costs, and provided free or discounted consulting services in exchange for patient referrals.

A Texas-based pathology lab will pay $63.5 million to settle whistleblower allegations that it violated the False Claims Act and Anti-Kickback laws, the Department of Justice announced.

Prosecutors had alleged that Miraca Life Sciences Inc. illegally providing physicians with funding for electronic health records systems, and free or discounted technology consulting services, in exchange for patient referrals.

The company, now known as Inform Diagnostics, is headquartered in Irving, Texas. The company changed owners in 2017.

The Department of Health and Human Services in 2006 adopted provisions that allowed laboratories to provide EHR donations to physicians under certain conditions, but federal prosecutors said Inform Diagnostics violated those conditions.  HHS withdrew those exemptions for laboratories in 2013. 

"Patients deserve the unfettered, independent judgment of their healthcare professionals. Offering financial incentives to physicians and medical practices in exchange for referrals undermines citizens' trust in our healthcare system," U.S. Attorney Maria Chapa Lopez of the Middle District of Florida said in prepared remarks.

"With this settlement, our Civil Division confirms its commitment to our nation's critical struggle against practices that put public health programs at risk," she said.

The allegations stem from three lawsuits that were filed under the whistleblower provisions of the False Claims Act. The whistleblowers' share of the settlement announced today has not yet been determined. 

Inform Diagnostics issued a statement saying it was "pleased to put this matter behind us and to move forward with renewed commitment to our clients and each other."

"We have admitted no wrongdoing as part of the agreement with the DOJ, but resolving this issue will allow us to focus on what's most important—providing best-in-class anatomic pathology services to our clients and building a business that is successful and sustainable," the company said.

The settlement of $63.5 million will be paid by Miraca Holdings, and Inform Diagnostics will not be subject to a Corporate Integrity Agreement, the company said.

Since the change of ownership in November 2017, Inform Diagnostics said it is led by a new group of senior executives and board members that has "put compliance at the center of everything we do."

“Offering financial incentives to physicians and medical practices in exchange for referrals undermines citizens' trust in our healthcare system.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The alleged illegal activity occurred under previous ownership, when the company was known as Miraca Life Sciences Inc.

Miraca will pay the $63.5 million settlement, and Inform Diagnostics says it admitted to no wrongdoing.

The allegations stem from three whistleblower lawsuits.


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