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Genetic Testing Company to Pay $42.6 Million to Resolve Kickback Claims

The company also agreed to a twenty-five year period of exclusion from participation in any federal health care program.

The Justice Department announced this week that UTC Laboratories, Inc. (RenRX) has agreed to pay $41.6 million, and its three principals, Tarun Jolly, M.D., Patrick Ridgeway, and Barry Griffith, have agreed to pay $1 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for pharmacogenetic testing and for furnishing and billing for tests that were not medically necessary.  RenRX, a laboratory company headquartered in New Orleans, Louisiana, also agreed to a twenty-five year period of exclusion from participation in any federal health care program.

“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system.  Today’s settlement reflects the Department of Justice’s commitment to ensuring that taxpayer monies are well spent and not wasted on unnecessary medical testing,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.

“Healthcare fraud, in any incarnation, hurts patients, honest medical practitioners, and all of the nation’s taxpayers,” said United States Attorney for the Eastern District of Louisiana Peter G. Strasser.  “The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies, both civil and criminal, to address signs of waste and abuse by providers in our healthcare markets.”

The government alleged that between 2013 and 2017, UTC and its principals offered and paid remuneration to physicians to induce the ordering of pharmacogenetic tests, purportedly in return for their participation in a clinical trial known as the Diagnosing Adverse Drug Reactions Registry (DART), clinical trial identifier NCT01970709.  The government also alleged that UTC and its principals offered and paid remuneration, including sales commissions, to entities and individuals as part of the scheme, and furnished pharmacogenetic tests that were not medically necessary and billed the Medicare program.

“The payment of cash and thinly-disguised referral bribes, as contended by the government, resulted in a more than $42 million dollar resolution in this case, said Special Agent in Charge CJ Porter of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Additionally, my agency barred RenRX from receiving any payments from federal health programs for a full 25 years.  Genetic testing scams are becoming all too common. OIG has a genetic testing fraud alert here.”

The settlement announced today resolves allegations in six lawsuits pending in the United States District Court for the Eastern District of Louisiana:  United States ex rel. Bergeron v. UTC Labs., LLC, et al., No. 16-15440 (E.D. La.); United States ex rel. McNeil v. Tarun Jolly, UTC Labs., LLC, et al., No. 14-2247 (E.D. La.); United States ex rel. Green &  Lawson v. UTC Labs., LLC d/b/a Renaissance RX & Stone Surgical, LLC, No. 15-297 (E.D. La.); United States ex rel. Church v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-877 (E.D. La.); United States ex rel. Outerbridge v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-1445 (E.D. La.).  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in these cases.

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.

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