A New Jersey-based clinical laboratory and its chief executive officer agreed to pay more than $13 million to the Department of Justice (DOJ) to settle illegal kickback allegations.
RDx Bioscience and CEO Eric Leykin engaged in a scheme, between 2017 and 2023, to pay five different types of kickbacks designed to induce referrals for lab testing, the DOJ alleged in its settlement agreement published Wednesday.
Under the agreement, RDx and Leykin will pay approximately $10.3 million to the DOJ and $2.9 million to New Jersey, for portions of alleged false claims made to the state’s Medicaid program.
The details: Leykin involved independent marketers in the kickbacks, which were allegedly paid to healthcare providers, their staff, and principals at certain substance abuse recovery centers. The kickbacks were disguised on the books as investment returns, consulting fees, or medical director fees, the DOJ said.
The laboratory billed Medicare, Medicaid, and other federal programs for laboratory tests that weren’t reasonable or necessary, the agency alleged, adding some claims were duplicates of other claims submitted for the same lab service for the same patient on the same day.
“Regardless of how they are disguised, kickbacks for laboratory referrals are illegal and can corrupt medical providers’ decision-making and subject patients to expensive and unnecessary testing,” Brian Boynton, principal deputy assistant attorney general and head of the DOJ’s Civil Division, said in a press release. “We will hold accountable individuals and entities who participate in kickback schemes that harm taxpayers and threaten the integrity of federal healthcare programs.”
Compliance considerations: Under the settlement, RDx and Leykin must identify any unallowable costs the company billed to Medicare, Medicaid, TRICARE, or other federal health programs or their contractors within 90 days. The payments must be adjusted to account for the unallowable portions and the federal government repaid for any overpayments it made to RDx and Leykin, plus interest and penalties.
The settlement leaves the door open for the DOJ to audit RDx and Leykin in the future.
RDx and Leykin agreed to fully cooperate with any further investigations by the DOJ.
RDx did not reply to a request for comment.
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