The DOJ announced that Daniel Hurt, owner and/or operator of Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC, and Sonoran Desert Pathology Associates LLC, will pay $27 million to resolve allegations of violating the False Claims Act by submitting claims to Medicare for medically unnecessary cancer genomic (CGx) tests. Chilivis Grubman attorneys previously wrote about the government pursuing criminal actions in response to fraudulent CGx test claims being submitted to federal health care programs. CGx testing is used to predict an individual’s risk of developing cancers in the future, but Medicare will only cover these tests for beneficiaries with a history of cancer as they are not diagnostic tests.

The DOJ alleged that Hurt paid and received kickbacks in exchange for Medicare beneficiary referrals in violation of the Anti-Kickback Statute. From January 2019 to November 2021, Hurt allegedly conspired with telemarketing agents, telemedicine providers, laboratories, and hospitals.  Telemarketing agents marketed “free” CGx tests to Medicare beneficiaries. In turn, telemedicine providers improperly prescribed CGx tests that were not medically necessary and reference laboratories conducted the unnecessary testing. Ultimately, the billing laboratories and hospitals submitted the fraudulent claims for payment to Centers for Medicare and Medicaid Services.  

In addition to paying $27 million, Hurt and his companies agreed to be excluded by the Department of the Health and Human Services Office of Inspector General from all federal health care programs. Hurt also previously pleaded guilty to criminal health care fraud offenses related to his CGx testing scheme. Upon announcement of Hurt’s civil settlement, U.S. Attorney Philip R. Sellinger for the District of New Jersey comment that “[s]chemes that seek to siphon money from these programs with unnecessary medical tests are especially egregious. We will do everything we can to protect the public and the services they need, and to hold accountable those who try to bilk the system.” 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to False Claims Act litigation and health care fraud matters. If you need assistance with such a matter, please contact us today.