Last week, the U.S. Department of Justice amended its complaint in a laboratory testing fraud case to add six Texas physicians, including one from Lewisville and one from Corinth, as defendants.
The case alleges False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute and the Stark Law, and says the six physicians caused claims to be improperly billed to federal health care programs for medically unnecessary laboratory testing, according to a news release from the DOJ. The physicians allegedly received tens or hundreds of thousands of dollars in kickbacks in return for their referrals of unnecessary lab testing.
The original complaint — announced April 4 — listed 18 defendants, many of them from Texas, but none from southern Denton County. The DOJ then added six more defendants, including two from southern Denton County:
- Elizabeth Seymour, M.D., of Corinth, allegedly received over $280,000 from two MSOs, Ascend and Eridanus, in return for her referrals.
- Hong Davis, M.D., of Lewisville, allegedly received over $70,000 from two MSOs, Ascend and Herculis, in return for her referrals.
The complaint alleges that laboratories True Health Diagnostics LLC and Boston Heart Diagnostics Corporation conspired with small Texas hospitals, including Rockdale Hospital dba Little River Healthcare, to pay physicians to induce referrals to the hospitals for laboratory testing, which was then performed by THD or BHD. As alleged in the complaint, the hospitals paid a portion of their laboratory profits to recruiters, who in turn kicked back those funds to the referring physicians, according to the DOJ. The recruiters allegedly set up companies known as management service organizations to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals. The complaint alleges that laboratory tests resulting from this referral scheme were billed to various federal health care programs, and that the claims not only were tainted by improper inducements but, in many cases, also involved tests that were not reasonable and necessary.
“The Department of Justice is committed to holding accountable health care providers, including physicians, who commit fraud,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “Improper financial arrangements involving physicians and laboratories can distort physicians’ medical judgments, waste taxpayer dollars and subject patients to unnecessary testing or other services.”
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