May 7, 2020 – New Orleans, Louisiana – – A New Orleans pharmacogenetics testing company and three of its principals will pay $42.6 million to settle multiple whistleblower lawsuits alleging the company defrauded the United States government by billing for unnecessary pharmacogenetics testing and paying kickbacks in return for laboratory referrals.
In addition to the $42.6 million, New Orleans-based UTC Laboratories also agreed to a 25-year exclusion period from participating in federal health care programs. UTC Laboratories ceased operations in 2017 due to multiple whistleblower complaints and an ensuing government investigation. UTC Laboratories, previously known as Renaissance RX and RenRX, performed pharmacogenetics testing, which looks at specific genes to help figure out the types and dosages of medicines that may be right for patients.
Whistleblower Attorneys Announce $9 Million Reward to be Split Among Five Relators
The whistleblower attorneys from the law firm of Baum Hedlund Aristei & Goldman represented one of five whistleblowers to bring the allegations of healthcare fraud to the government’s attention. While the settlement was agreed to last year, attorney Mark H. Schlein has announced that the whistleblowers will share a reward of roughly $9 million for blowing the whistle on UTC Laboratories and its principals named in litigation.
The whistleblower cases include:
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.)
“Brave whistleblowers have always been critical in the never-ending battle to prevent fraud against the United States,” said Mr. Schlein, whose client in the litigation was a company insider who wishes to remain anonymous.
“Now, with our government literally spending trillions of dollars to save lives and battle this terrible pandemic, fighting fraud has never been more important. I am grateful to the courage shown by the relators in this case. By stepping forward and assisting the government, they were able to shut down a laboratory testing fraud scheme that was costing the United States and its taxpayers millions of dollars.”
Whistleblowers Allege UTC Laboratories Paid Kickbacks in Exchange for Genetic Testing Referrals in Violation of the False Claims Act
In their lawsuits, the relators (also known as whistleblowers) alleged UTC Laboratories violated the False Claims Act between 2013 and 2017 by paying kickbacks to entice doctors to order pharmacogenetics testing, purportedly in exchange for the doctors’ participation in a clinical trial. Pharmacogenetics is the study of how genes affect the body’s response to certain medicines. The UTC whistleblowers further alleged that during the same time period, UTC and its principals offered remuneration to entities and individuals for medically unnecessary pharmacogenetics testing and billed Medicare.
Under the False Claims Act, it is illegal for an individual or a company to knowingly offer, solicit, pay or receive anything of value (does not have to be money) in exchange for referrals (or the generation of business) that is paid for by federal healthcare programs.
According to the U.S. Justice Department, UTC Laboratories will pay $41.6 million to resolve the healthcare fraud allegations, while three of the company’s principals—Dr. Tarun Jolly, Patrick Ridgeway and Barry Griffith—will pay a total of $1 million.
Government Warns Genetics Testing Fraud “Becoming All Too Common”
CJ Porter, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS-OIG) said after the announcement of the $42.6 million resolution last year that genetics testing fraud is “becoming all too common.”
Genetic testing fraud happens when the Medicare program is billed for testing or screening that was medically unnecessary and/or was not ordered by a Medicare beneficiary’s doctor.
Those engaging in the fraud offer Medicare beneficiaries “free” cheek swabs or screenings for genetic testing to obtain their Medicare information, which can then be used to steal their identity or submit fraudulent billing. Fraudsters commonly target beneficiaries through telemarketing calls, booths set up at health fairs or other public events, and door-to-door visits.
Those who agree to receive genetic testing or verify personal or Medicare information may receive cheek swabs, testing kits, or in-person screenings even if they were never ordered by their treating physician or deemed medically necessary.
OIG set up a hotline for those who suspect genetics testing fraud. If you have firsthand knowledge of genetics testing fraud, we encourage you to contact our whistleblower attorney to discuss the case. Filing a whistleblower lawsuit not only saves taxpayer dollars, it could also result in a substantial reward if the action results in a recovery.
About Baum Hedlund Aristei & Goldman
The national law firm of Baum Hedlund Aristei & Goldman has decades of experience representing whistleblowers who come forward and expose fraud against the government. Our firm has been on the winning side of whistleblower cases against some of the largest corporations in the world, including major aircraft manufacturers, pharmaceutical drug makers, medical device manufacturers, care providers, and other government contractors. Our success in these cases has earned substantial rewards for our clients and exposed harmful industry practices and marketing schemes that put the general public in danger.
