Recently, Genomic Health, Inc., agreed to pay $32.5 million to resolve allegations that the company violated the False Claims Act by engaging in a nationwide scheme to improperly bill Medicare for lab tests often used to diagnose and treat cancer patients. Specifically, the United States alleged that Genomic Health tried to evade the 14-day Medicare rule, which governs the billing of genomic tests, like the ones provided by Genomic Health.
The principal test provided by Genomic Health is the Oncotype Dx®, which is used for patients diagnosed with breast, colon, and prostate cancers. The United States alleged that Genomic Health knowingly submitted false claims for reimbursement to the Medicare program on behalf of Medicare beneficiaries for these tests from January 1, 2008, through February 29, 2020. Under the 14-day Date of Service rule, claims for payment for tests that were ordered within 14 days after a hospital inpatient’s discharge were required to be submitted by the hospital to Medicare. Instead, Genomic Health allegedly “cancelled, delayed, held or otherwise did not process orders for tests” that were subject to the 14-day rule and submitted claims for reimbursement to the Medicare Program with a date of service that resulted in direct reimbursement to Genomic Health. This caused Medicare to incur costs beyond what it would have otherwise paid.
The United States further alleged that during that same period, Genomic Health knowingly submitted or conspired to submit false claims for reimbursement to Medicare by permitting, failing to discourage, and encouraging providers who initially ordered tests within 14 days following a hospital in-patient’s discharge from the hospital to cancel those orders and reorder the tests at least 14 days following the in-patient’s discharge from the hospital.
Additionally, from January 1, 2008, through December 31, 2017, Genomic Health engaged in the same practices as above, but for outpatient discharges as well.
Finally, the government alleged that Genomic Health knowingly and willfully paid remuneration to hospitals by deliberately failing to collect payments from those hospitals for tests performed by Genomic Health for inpatient and outpatient beneficiaries when the tests were ordered within 14 days following the patient’s discharge from the hospital, from January 1, 2007, through December 31, 2018.
Of the $32,500,000 settlement, $16,250,000 is restitution and $5,687,500 will be paid to the relator who brought the original qui tam lawsuit. A second relator also brought a prior qui tam lawsuit, but those claims were largely dismissed without prejudice – with the exception of the claims asserted by the relator and included in the Covered Conduct (as outlined above).
“This settlement rightly requires the payment of double damages caused by delayed tests for cancer patients for no reason other than to circumvent a Medicare requirement and allow improper payment to GHI,” said U.S. Attorney Breon Peace for the Eastern District of New York. “We will continue to enforce Medicare rules to protect the program and its vital role in our health care system, especially for those suffering from the ravages of cancer.”