Genesis Reference Laboratories Settles for Over $1 Million in False Claims Act Case Involving Kickbacks

Genesis Reference Laboratories LLC (Genesis), based in Orlando, Florida, has consented to pay $1,195,845 to settle allegations under the False Claims Act. The allegations involve illegal kickbacks paid to healthcare providers, breaching the Anti-Kickback Statute, to induce laboratory test referrals. As part of the settlement, Genesis will aid the Justice Department in further investigations and litigation against other parties involved in the scheme.

The Anti-Kickback Statute, central to this case, prohibits remuneration to influence referrals for services under federally funded healthcare programs like Medicare and Medicaid. The statute aims to preserve medical decision-making from financial biases. In this case, between 2019 and 2021, Genesis allegedly paid marketing companies to arrange referrals for its laboratory tests. These companies then kicked back part of the payments to healthcare providers, using management services organizations (MSOs) to mask these kickbacks as investment returns. Genesis, aware of these practices, submitted claims to Medicare for tests ordered by these providers.

U.S. Attorney Philip Sellinger emphasized that the healthcare system should be free of kickbacks, noting the pursuit of entities that engage in such fraud. Special Agent Naomi Gruchacz highlighted that violations of the Anti-Kickback Statute could lead to unnecessary medical testing and influence medical decisions. This settlement is part of a broader effort by the government to combat healthcare fraud, leveraging the False Claims Act as a key tool. To date, related efforts have recovered over $36 million, involving settlements with physicians, laboratories, medical practices, and healthcare executives.