Oncology San Antonio, PA and its affiliated physicians will pay $1.3 million, and CorePath Laboratories, PA (CorePath) will pay over $2.7 million, plus interest, to the United States and Texas to resolve False Claims Act violations. The lawsuit was brought by a whistleblower, who will receive a reward for his efforts.

According to the allegations, in August 2016, Oncology San Antonio conspired with CorePath, a diagnostic reference laboratory, to create a kickback scheme. Oncology San Antonio would receive $115 per biopsy they referred to CorePath, who performed in-office bone marrow biopsies and diagnostic testing at Oncology San Antonio. These payments were received by the private practices of three physicians employed by Oncology San Antonio. One of those physicians, Dr. Jayasree Rao, also performed medically unnecessary services through both her own practice and Oncology San Antonio, subsequently billing Medicare, TRICARE, and Texas Medicaid for those treatments.

Paying for biopsy referrals constitutes a kickback under the Anti-Kickback Statute, which makes it illegal for healthcare providers to offer incentives in return for referrals. Kickbacks harm patients by subjecting them to providers who put profits over people, possibly leading to poor quality or even harmful services.

The Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) stated, “Violations of the Anti-Kickback Statute involving oncology services can waste scarce federal health care program funds and corrupt the medical decision-making process … Individuals who participate in the federal health care system are required to obey laws meant to preserve both the integrity of program funds and the provision of appropriate, quality services to patients.”

In addition to the settlement payments, Dr. Rao and her practice entered a three-year Integrity Agreement with HHS-OIG to ensure no further violations occur. The claims were brought under the qui tam provisions of the False Claims Act by Dr. Slavisa Gasic, a former employee of Dr. Rao. While the award Dr. Gasic will receive has not been determined yet, whistleblowers can receive 15-25% of the government’s recovery in a qui tam False Claims Act settlement.