On December 14, 2022, the Department of Justice reported that Dr. Vijesh Patel, M.D., and his wife, Laju Patel, who was his office manager, agreed to pay over $420,000 to settle False Claims Act allegations that the couple referred patients for laboratory testing in exchange for kickbacks in violation of the Anti-Kickback Statute. The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, is a criminal statute that prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items of services covered by Medicare, Medicaid, and other federally funded healthcare programs. Remuneration can include anything of value such as free rent, hotel stays and accommodations, and the like. The statute covers both the payers of kickbacks as well as the recipients. It was enacted to ensure that the judgment of medical providers is not compromised by improper incentives, but rather is based on the needs and best interests of the patient.
This settlement resolved allegations that Dr. and Mrs. Patel received kickbacks for referrals to three laboratories in particular. For one laboratory, located in Texas, Dr. Patel allegedly received thousands of dollars in payments for ordering tests from True Health Diagnostics LLC. Dr. Patel and True Health Diagnostics attempted to conceal the kickback payments by disguising them as investment returns. The United States has filed a lawsuit under the False Claims Act against the former CEO of True Health for such conduct. For another laboratory, located in New Jersey, Dr. Patel also received thousands of dollars in kickbacks disguised as investment returns for ordering laboratory tests from RDx Bioscience, Inc. For another laboratory, located in South Carolina, Dr. Patel allegedly received hundreds of dollars each month in inflated space rental payments for ordering lab tests from Labtech Diagnostic LLC.
The False Claims Act provides the government with one of the most powerful tools in combating health care fraud. This settlement illustrates the government’s efforts in holding schemers and fraudsters responsible for their misconduct in the health care industry.
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