A local laboratory company allegedly tested patients’ feces unnecessarily and billed the federal government, leading to charges of Medicare fraud. Now, they’ll pay between $17-43 million to settle those allegations and others, according to the Department of Justice.
A spokesperson for Genova Diagnostics Inc. said the company denied any guilt or wrongdoing and settled the suit “to avoid considerable distraction and expense.”
Genova allegedly violated the False Claims Act, a Civil War-era law that outlines punishments for businesses that defraud the government.
A lawsuit filed in federal court alleged Genova improperly submitted claims to Medicare, TRICARE (the government health care program for service members and their families) and the federal employee health program for tests that weren’t medically necessary.
The suit highlighted three tests — the NutrEval and GI Effects Lab Test, which both analyze stool samples, and IgG allergen, a food sensitivity test that is the subject of considerable debate.
The lawsuit also alleged that Genova Diagnostics Inc. engaged in improper billing techniques and referred patients to three phlebotomy vendors to which the company had improper financial ties, in violation of the Stark Law.
“This office is dedicated to ensuring that health care providers in the Western District make medical decisions that benefit their patients, not the providers’ bottom line,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina.
“We conducted our own thorough investigation and are confident in the medical necessity of our tests and that Genova acted completely appropriately,” the Genova spokesperson told the Citizen Times.
Under the settlement, Genova will pay approximately $17 million, the DOJ release said— through the “surrender of claim funds held in suspension by Medicare and TRICARE,” meaning Genova won’t be reimbursed for other services rendered to Medicare and TRICARE patients.