The former CEO and a former sales executive of a Massachusetts laboratory have agreed to pay $1.2 million to resolve False Claims Act allegations of paying illegal kickbacks to physicians disguised as managed service organization distributions to induce laboratory test referrals, the Justice Department said in a June 1 news release.
Susan Hertzberg, former CEO of Boston Heart Diagnostics Corporation in Framingham, Mass., and Matthew Theiler, the company’s former VP of sales, each agreed to pay $600,000 to resolve allegations that from 2015 to 2017 they approved and implemented a scheme in which marketers paid physician kickbacks disguised as MSO distributions to induce referrals for laboratory testing, including medically unnecessary testing, at Texas hospitals.
Frederick Brown, MD, of Missouri City, Texas, agreed to pay $309,055 to resolve allegations that he received kickbacks disguised as MSO payments in exchange for ordering laboratory tests from two Texas facilities between November 2015 and November 2017. Six marketers and their associated entities agreed to pay an additional $550,000 to resolve related allegations.
The settlements bring the Justice Department’s total civil False Claims Act recoveries since 2019 for laboratory kickback schemes disguised as MSO investment distributions to more than $61 million, including recoveries from more than 50 physicians.
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