Recently, the United States Department of Justice (DOJ) announced a settlement with laboratory marketer Thomas Carnaggio and his marketing company, South Ventures LLC, and three physicians in North Carolina – along with their respective medical practices. The $1,373,400 settlement resolves allegations that the individuals and companies were involved in laboratory kickback schemes. The settlement also accounts for future cooperation by the settling parties to help with ongoing investigations into other participants of the alleged schemes.
According to the DOJ, Carnaggio and his marketing company offered kickbacks to doctors on behalf of a laboratory located in Anderson, South Carolina. The doctors and their medical practices allegedly received kickbacks from the laboratory in return for referrals, which resulted in the submission of false or fraudulent laboratory testing claims to Medicare and TRICARE.
Carnaggio and South Ventures LLC agree to pay $400,000 to resolve allegations that from January 2017 to January 2020, they offered thousands of dollars in kickbacks to physicians in North and South Carolina. The kickbacks were often in the form of disguised payments of purported office space rental or phlebotomy payments, and were intended to induce the doctors to order laboratory testing. Carnaggio and the company allegedly received commissions from the laboratory as independent contracts based on the volume and/or value of Medicare and TRICARE referrals received by the laboratory.
Steven Bauer and his practice – Ballantyne Medical Associates PLLC – agreed to pay $205,000 to resolve allegations that from May 2016 to December 2021 they were the recipients of kickbacks in the form of purported office space rental and phlebotomy payments from the laboratory, in return for ordering lab testing. Dr. Bauer and his office did assist the government’s investigation and as such, received credit under the DOJ guidelines for taking cooperation into account in False Claims Act cases.
Larry Berman and his namesake practice agreed to pay $385,000 to resolve allegations that from July 2017 to November 2021, they received thousands of dollars of kickbacks disguised as purported office space rental and phlebotomy payments from the laboratory in exchange for ordering lab tests.
Finally, Alireza Nami and his practice – Joint and Muscle Medical Care PC – agreed to pay $383,400 to resolve allegations that they received thousands of dollars in kickbacks from the laboratory disguised as the purchase price for used laboratory equipment, office space rental, and phlebotomy payments, in return for ordering lab tests.
“Using financial inducements to steer patients to a particular laboratory for taxpayer-funded testing can distort medical decision making and result in unnecessary services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will diligently pursue those who undermine the integrity of federal health care programs by violating rules designed to protect the programs and their beneficiaries from fraud and abuse.”
“Schemes like this compromise the integrity of our healthcare programs,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina. “We will continue to pursue those engaged in illegal kickbacks and hold them accountable.”