A California mobile lab and x-ray provider will pay $17.5 million for falsely billing Medicare and Medi-Cal, according to the U.S. Department of Justice (DOJ).
The settlement was reached as part of a lawsuit filed against Diagnostic Laboratories and Radiology by two former employees, Jon Pasqua and Jeff Hauser, under the whistleblower provisions of the federal and state False Claims Acts. The suit alleged that the company paid kickbacks for referral of mobile lab and radiology services that were subsequently billed to Medicare and Medi-Cal.
Diagnostic Laboratories allegedly took advantage of Medicare's different reimbursement system for inpatient and outpatient services by charging skilled nursing facilities in California discounted rates for inpatient services paid by Medicare -- in exchange for the facilities' referral of outpatient business. The scheme enabled the skilled nursing facilities to maximize profit for inpatient services by decreasing the costs of providing these services, and it gave Diagnostic Laboratories a stream of outpatient referrals that it could bill to Medicare and Medi-Cal, DOJ said.
The U.S. Attorney's Office for the Central District of California; the DOJ's Civil Division, Commercial Litigation Branch; and the Department of Health and Human Services' Office of Inspector General collaborated on the investigation.
