(Reuters) – New Orleans-based genetics testing company and its three principals will be paying $ 42.6 million to settle charges they defeated the federal government by paying kickbacks for referrals and billing for unnecessary medical tests t , the Department of Justice said on Wednesday.
UTC Laboratories Inc., known as RX Renaissance or RenRX, also agreed to ban 25 years on participating in any federal health care program, said the Department of Justice.
The resolution of Wednesday arranged six whistleblowing procedures which were guilty of the company violating the federal Small Claims Act.
UTC will pay $ 41.6 million, and its three principals, including Dr Tarun Jolly, Barry Griffith and Patrick Ridgeway, will pay $ 1 million. The Department of Justice said there was no acknowledgment of liability.
The company ceased operations in 2017 due to whistleblowers and probe allegations that followed, a spokesperson for UTC principals said.
“After five years of legal protection, the principals eventually agreed that they would be settled, having stopped energy to continue with long legal proceedings,” the spokesman said in a statement.
The Department of Justice informed the defendants that they had paid physicians from 2013 to 2017 to encourage them to order genetic tests, taking part in a clinical trial to create the registry of people genetically tested.
He also said that the defenders offered kickbacks for other entities and individuals, and they put Medicare on a bill for unnecessary genetic tests.
According to whistleblowers complaints, the “Drug Reaction Registry Diagnosis”, or DART trial, was intended to catalog the effects of genetic testing of drug regimes and clinical outcomes for 250,000 patients.
The defendants were accused of false representation that Medicare would cover a test which was a prerequisite for enrollment in the registry.
“Health care fraud, at all, makes patients, honest medical practitioners, and every taxpayer of the nation hurt,” said Attorney General Peter Strasser in New Orleans in a statement.
The False Claims Act allows whistleblowers to sue on behalf of the government, and to share recoveries.
On 27 September, federal agents made a plethora of genetic testing laboratories and imposed a penalty on 35 people over an alleged fraud which resulted in $ 2.1 billion of losses resulting from federal health insurance programs.
The government also issued a consumer alert on genetic test fraud.
Reporting by Jonathan Stempel in New York; Edited by Bill Berkrot and Sherry Jacob-Phillips
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