In one of the first False Claims Act settlements of the year, California diagnostic laboratory Exceltox agreed to pay $357,584 to resolve allegations that it violated the False Claims Act by submitting (or causing to be submitted) claims for genetic tests to Medicare without valid physician oversight.
According to the allegations found in the settlement agreement, from September 2015 to November 2015, Exceltox contracted with MD Global for independent contractor marketing services. MD Global then contracted with Seth Rehfuss and Good Samaritans of America who provided independent contractor services to MD Global. Rehfuss and Good Samaritans of America were responsible for persuading groups of senior citizens in senior housing complexes to submit to genetic tests to Exceltox without “sufficient involvement of a health care professional,” despite Medicare rules requiring orders from a treating physician.
The settlement does not release Exceltox from any criminal liability, any liability of individuals, or any liability for personal injury or property damage or for other consequential damages arising out of the Covered Conduct.
This settlement follows a January 2019 guilty plea by Rehfuss that he engaged in a conspiracy to commit health care fraud and was sentenced to fifty months in prison in May 2019. In addition to his prison sentence, Rehfuss was sentenced to three years of supervised release and ordered to pay restitution of $434,963 and forfeit $66,844.
According to the Department of Justice, Rehfuss admitted to using Good Samaritans of America to gain access to groups of senior citizens in low-income senior citizen housing complexes and persuaded them to submit to genetic tests without any involvement of a health care professional. In contradiction to what he told the senior citizens and staff at the housing complexes, Rehfuss was a sales representative for laboratories. To convince senior citizens to submit to the genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to conditions such as heart attacks, stroke, cancer or even suicide if they did not undergo genetic testing.
Then, to get the tests authorized, Rehfuss advertised on Craigslist to recruit health care providers who were paid thousands of dollars per month by Rehfuss and others to sign their names to requisition forms authorizing testing for patients they never examined or had any interaction with. Rehfuss and his conspirators established email accounts, phone numbers, and “office manager” names for the requisition forms that made it seem as though the health care providers were treating the patients being swabbed and would also be evaluating the test results.
The DOJ also notes that Rehfuss and his coconspirators were working to expand the scheme outside of New Jersey to states like Georgia, Delaware, Virginia, Maryland, Pennsylvania, Florida, and Arizona.
The settlement agreement between DOJ and Exceltox notes that Exceltox did not make any admission of liability nor did the United States make any concession that its claims are not well-founded.