In a recent striking example of the paramount role whistleblowers play in safeguarding the integrity of healthcare systems, a False Claims Act settlement has spotlighted the dark underbelly of laboratory kickback schemes in the United States. Two laboratory marketers, George Carralejo and Michael Jeresaty, alongside their companies and five physicians, have agreed to pay over $1.5 million to settle allegations of their involvement in illicit activities designed to game taxpayer-funded healthcare programs.

The Marketer Settlements

George Carralejo and his marketing company, OC Genetic Consultants Inc. settled for $400,000 for their alleged involvement in two kickback schemes. The first involved a conspiracy with Ralston Health Group Inc. to provide illicit payments to a Houston doctor to promote laboratory testing referrals to RDx Bioscience Inc. and NEXT Bio-Research Services LLC. The second scheme implicated a coordination with BeauMed Consultants LLC hiding kickbacks as “consulting fees” to an Arkansas physician for laboratory testing referrals to RDx.

Michael Jeresaty and Ralston Health Group Inc. settled for $320,000, admitting to the payment of kickbacks to the aforementioned Houston physician, previously settled with a South Carolina doctor, and made referrals to RDx.

The Physician Settlements

The settlements also address allegations against five physicians who reportedly received kickbacks through the guise of management service organizations (MSOs) for referring patients to RDx and other laboratories.

These settlements are part of the Justice Department’s ongoing efforts to hold accountable those who engage in unlawful kickback schemes, including marketers, physicians, and their associated entities. The involved parties have also agreed to cooperate with the Justice Department’s ongoing investigations related to these schemes.

The case brings to the forefront the insidious nature of kickback schemes, wherein financial remunerations are offered to healthcare providers to influence medical decisions and referrals, undermining both the ethical framework of medical practice and the financial sustainability of healthcare programs. The False Claims Act, a critical tool in combatting healthcare fraud, allows individuals to sue on behalf of the government for false claims and share in any recovery. It’s under this framework that whistleblowers—a designation that has evolved to mean heroes in suits—empower regulatory bodies to pursue bad actors.