Miami businessman, Daniel Hurt, the former owner of Fountain Health Services LLC, Verify Health, Landmark Diagnostics, First Choice Laboratory LLC, and Sonoran Desert Pathology Associates LLC, will pay over $27 million to resolve allegations of False Claims Act violations. Hurt allegedly caused his companies to submit false claims to Medicare leading to improper reimbursement. Hurt was also charged criminally for these offenses, to which he pled guilty. The civil claims were brought by a whistleblower who received a reward amounting to 17% of the settlement for his fraud fighting efforts.

The United States alleged that from January 2019 through November 2021, Hurt intentionally submitted false claims for cancer genomic (CGx) tests that were not only medically unnecessary, but also procured through an illegal kickback scheme. Hurt allegedly colluded with telemarketing agents to solicit customers – Medicare beneficiaries – for “free” CGx tests. He also conspired with telemedicine providers to prescribe the medically unnecessary tests, then worked with laboratories to run the CGx tests and a hospital to submit the falsified claims to Medicare. These actions violated the Anti-Kickback Statute (AKS), which prohibits healthcare providers from giving incentives in exchange for referrals. Kickbacks jeopardize patients by exposing them to providers prioritizing profits over people, potentially resulting in subpar or even detrimental care.

The U.S. Attorney for the District of New Jersey stated that “Medicare and Medicaid are two vitally important health care programs that provide critical services to millions of Americans … Schemes that seek to siphon money from these programs with unnecessary medical tests are especially egregious.”

The settlement concludes a qui tam suit brought by whistleblower Robert Gerstein, who was a minority owner of Sonoran Desert Pathology and worked for Hurt as head of the billing operations for CGx tests. For his efforts in the case, Gerstein will receive up to $4.7 million, 17% of total settlement.