/>iHeadlines that Matter for Companies and Executives in Regulated Industries
Owner, Operator of Texas Lab Charged for $79 Million Medical Testing Fraud Scheme
On November 20, Osman Syed, the owner and operator of a laboratory in Texas, was charged with three counts of health care fraud, conspiracy to engage in money laundering, and three counts of money laundering related to his alleged participation in a respiratory pathogen panel (RPP) testing fraud scheme.
The government alleges that Syed caused his laboratory, BioDX Labs LLC, to bill more than $79 million in fraudulent claims to Medicare and state Medicaid programs for RPP tests that were not medically necessary. In some instances, the RPP tests billed to Medicare and Medicaid were not actually performed. According to court documents, Syed used a physician’s personal information — without the physician’s awareness or approval — to submit millions of dollars in claims to Medicare and Medicaid for RPP tests. As alleged, these claims were made despite the physician never having treated the beneficiaries for any respiratory symptoms and not using the RPP tests for their treatment. Syed then allegedly laundered the monies received by transferring large amounts to foreign bank accounts.
The government seized over $15 million in cash related to the fraud scheme.
The US Department of Justice’s (DOJ) press release can be found here.
CEO and Pharmaceutical Company to Pay $47 Million for FCA Violations
On November 15, pharmaceutical company QOL Medical LLC and its CEO Frederick Cooper agreed to pay $47 million to resolve allegations that they violated the False Claims Act (FCA) by offering kickbacks.
According to the government, QOL offered kickbacks in the form of free Carbon-13 breath test services in attempt to encourage more claims to be submitted for QOL’s drug Sucraid — a therapy for Congenital Sucrase-Isomaltase Deficiency (CSID). The government alleged that QOL offered free Carbon-13 breath test kits and claimed that the test could “rule in or rule out” CSID, which the test actually cannot specifically diagnose. QOL then allegedly paid a laboratory to analyze the test results and report the results to QOL so they could target sales for Sucraid to those providers with patients receiving positive Carbon-13 breath tests.
The settlement agreement resolves allegations originally brought in a qui tam action by former QOL employees, United States ex rel. John Doe 1 et al v. QOL Medical LLC, et al., No. 1:20-cv-11243.
The DOJ’s press release can be found here.
Home Health Care Company Owner Sentenced for $7.9 Million Health Care Fraud Conspiracy
On November 15, Muhammad Zafar, owner of a home health care company in Michigan, was sentenced to three years and five months in prison for his participation in a $7.9 million health care fraud conspiracy.
As the government alleged, Zafar conspired with doctors and other owners of home health care companies to offer kickbacks to beneficiary recruiters in exchange for the personal information of Medicare beneficiaries. Allegedly, Zafar and his co-conspirators then used the personal information they received to bill claims to Medicare for services that were not provided or not medically necessary. Zafar pleaded guilty to submitting more than $390,000 in false and fraudulent claims to Medicare.
According to court documents, Zafar was an international fugitive for more than seven years before facing his charges. The government alleged that on the same day he appeared for his initial appearance in June of 2015, he breached his court-issued bond by crossing the international border into Canada and then flying to Pakistan.
The DOJ’s press release can be found here.
Rebekkah R.N. Stoeckler also contributed to this article.
