Recently, San Diego-based Phamatech, Inc., and its CEO-Founder, Tuan Pham, reached a $3 million settlement to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for laboratory drug-testing services. Phamatech is a medical technology company that manufactures diagnostic devices and provides laboratory testing.
The action, originally brought by former Phamatech employee and whistleblower John Polanco, alleged that the company improperly paid a medical clinic to induce it to refer orders for laboratory drug-testing. Consequently, Phamatech received government reimbursement for those tests in violation of the federal Anti-Kickback Statute and the False Claims Act.
Phamatech allegedly paid kickbacks to Imperial Valley Wellness (IVW) to induce the medical practice group to order laboratory testing for its Medicare patients. For roughly two years, Phamatech allegedly paid IVW a per-specimen fee in exchange for the referral of urine samples from Medicare beneficiaries. The government also alleged that many of the samples referred by IVW to Phamatech under the arrangement were not medically necessary, and therefore, not lawfully eligible for Medicare reimbursement.
The settlement total is $3,043,484, of which $517,392 will go to the whistleblower, Mr. Polanco. As is typical, the claims resolved under the settlement are allegations only and no determination of wrongdoing or liability has been made.
“We are committed to protecting the integrity of the Medicare program and ensuring accountability under the False Claims Act. This settlement meets these goals,” said U.S. Attorney Robert Brewer. Brewer praised Assistant U.S. Attorney Paul Starita and federal agents from the Federal Bureau of Investigation (FBI) and Health and Human Services Office of Inspector General (HHS OIG), for their excellent work on this case.
“Paying to secure business increases costs—ultimately, leaving taxpayers to pick up the bill,” said Timothy B. DeFrancesca, Special Agent in Charge (SAC) for HHS OIG. “With our law enforcement partners, we will continue pursuing potential threats to our health programs.”
“The FBI is committed to rooting out fraud within the healthcare industry and works with the U.S. Attorney’s Office and law enforcement partners to find a just result in each case,” said FBI SAC Suzanne Turner. “We urge anyone with information about suspected healthcare fraud to contact their local FBI Field Office.”