On February 27, 2026, the Department of Justice announced that Atlanta Gastroenterology Associates (AGA) had agreed to pay $4.75 million to resolve allegations that it violated the False Claims Act (FCA) by receiving kickbacks from a pathology lab and performing medically necessary gastrointestinal pathology services.
According to the DOJ’s press release, AGA contracted with an Arkansas-based pathology lab Advanced Pathology Solutions (APS) “to construct and operate a limited-capacity pathology laboratory in [AGA]’s office.” AGA received various benefits from the lab, “in which histology technicians prepared and stained specimen sample slides and [AGA] billed Medicare and other insurers for the technical component of those services.” According to the DOJ, “in exchange, [AGA] agreed to exclusively refer patients to APS, which interpreted the slides and billed for the professional component of the services.”The government also alleged that AGA performed and billed for medically unnecessary services.
The case was investigated by attorneys from the DOJ’s Civil Fraud section in Washington, D.C., as well as from the U.S. Attorney’s Office in Little Rock Arkansas. The settlement was the result of a qui tam whistleblower lawsuit, although the name and details of the whistleblower’s recovery were redacted from the publicly-available settlement agreement.
This settlement is an important reminder that referral arrangements between physician groups and outside entities such as labs are subject to scrutiny under the Anti-Kickback Statute (AKS) and the Stark Law. Any such arrangement should be thoroughly vetted by healthcare counsel before execution to ensure compliance with those statutes.
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We represent physician practices and other healthcare providers in connection with False Claims Act investigations and litigation. If you need assistance with such a matter, please contact us.