In late July 2020, the United States Department of Justice (DOJ) announced a civil suit settlement with Sterling Healthcare Opco, LLC d/b/a Cordant Health Solutions (Cordant) surrounding allegations of illegal kickbacks paid to generate urine testing business from government-insured consumers. As part of the settlement, Cordant agreed to pay $11,942,913 to government healthcare programs and also agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS OIG).
According to the DOJ, Cordant paid millions of dollars in remuneration to Northwest Physicians Laboratories, LLC (NWPL) and Genesis Marketing Group (Genesis) in exchange for referrals of urine drug tests paid for by federal healthcare programs in violation of both the Anti-Kickback Statute and the False Claims Act. The kickbacks resolved in this settlement allegedly took place from January 2013 through July 2015 with NWPL and August 2013 through March 2015 with Genesis.
Cordant did not admit any wrongdoing as part of the settlement and agrees to continue working with any ongoing government investigation.
“The questionable business practices and unnecessary medical testing revealed in this matter only served to improve financial gain and not the patients’ well-being,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office. “This settlement outcome is but one example of DCIS’s on-going commitment to working with its law enforcement partners to protect the integrity of federal healthcare programs, especially the Department of Defense’s TRICARE program.”
CIA Requirements
The CIA, among other things, requires Cordant engage an Independent Review Organization (IRO) for the next five years. The IRO will need to assign individuals to conduct Arrangements Review and must either have expertise in fair market valuation issues or have the ability to associate a valuation firm to help with conducting the transactions review component of the Arrangements Review.
According to the CIA, the Arrangements Review must have two components: a systems review and a transactions review. If there are no material changes to Cordant’s systems, processes, policies, and procedures relating to Arrangements, the Arrangements Systems Review shall be performed for the first and fourth Reporting Periods. If Cordant materially changes the Arrangements systems, processes, policies and procedures, the IRO will perform an Arrangements Systems Review for the Reporting Period in which the changes were made (in addition to conducting the systems review for the first and fourth Reporting Periods). The Arrangements Transactions Review shall be performed annually.
The CIA also requires Cordant to routinely report to HHS OIG regarding its compliance with the CIA.
NWPL Criminal Case
This settlement follows a December 2019 indictment of NWPL and three executives for a conspiracy to pay and solicit kickbacks from various urine testing labs. Trial in the criminal case is set for February 2021.