San Diego-based genetic testing company Pathway Genomics will pay $4.1 million to settle a whistleblower’s False Claims Act lawsuit with the Department of Justice over allegations that it improperly paid kickbacks to physicians and medical groups for their referrals of patients on Medicare, Medicaid, the Department of Defense’s Tricare plan, and the Veterans Health Administration.

The alleged Medicaid and Medicare fraud scheme violated the False Claims Act, the federal Anti-Kickback Statute, and other federal and state laws, the complaint asserted.

“Kickbacks to health care providers in exchange for patient referrals undermine the medical judgment of physicians and exploit the trust of patients,” U.S. Attorney Laura Duffy said in a statement. “Kickback arrangements with physicians also place vital taxpayer funds at risk.”

The Medicare and Medicaid fraud allegations against Pathway were originally filed in a whistleblower lawsuit from a former company sales representative, Monique G. According to the whistleblower complaint filed in San Diego federal court, Pathway is accused of paying doctors and physician groups up to $20 per genetic test, with some receiving as much as $13,500 total in reimbursements.

Most of the doctors had never ordered these genetic tests until being enrolled in Pathway’s reimbursement program. Pathway Genomics would then obtain reimbursement for the tests from the government, according to the allegations.

Monique G., claimed that sales representatives were told to tell doctors that all patients should be tested regardless of their medical histories and that Pathway would find a way to get the tests paid for, according to the complaint.

In addition, sales reps were also instructed to tell doctors that the extra doctor visits to explain the results of the tests could earn the doctors even more money and be billed to insurance.

Monique G. could reportedly receive about $1.2 million of the settlement. As part of the settlement, Pathway has not admitted any wrongdoing in regards to Medicare and Medicaid fraud allegations.

Whistleblower Lawsuits

In a whistleblower lawsuit, an individual with knowledge of an organization’s activities provides information about fraud, corruption or other illegal activity. Whistleblowers are often employees, former employees and others who have access to company documents and internal information.

Whether you have evidence of fraud against the government or corruption at a private company, an experienced whistleblower attorney can investigate your claim and advise you on your legal options.