Posted December 30th, 2015.
Genetic Testing Company Agrees to Pay U.S., 29 States, D.C. and Relator $4.1 Million for Violations of Anti-Kickback Statutes
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WASHINGTON, December 30, 2015, Washington D.C. — Sanford Heisler Kimpel, LLP today announced that genetic testing giant Pathway Genomics Corporation has agreed to settle a qui tam suit and pay the United States government, 28 states and the District of Columbia $4.1 million.
Sanford Heisler Kimpel, along with Aashish Y. Desai of the Desai Law Firm, P.C., represented Relator Monique Gipson, who sued San Diego-based Pathway Genomics in the U.S. District Court for the Southern District of California under the whistleblower provisions of the federal False Claims Act, the federal Anti-Kickback Statute, and the relevant provisions of the false claims acts of the states and the District of Columbia pertaining to healthcare fraud. Gipson was a former sales representative at Pathway Genomics with first-hand knowledge of the company’s wrongdoing.
The whistleblower provisions of federal and state laws permit private citizens known as “relators” to bring lawsuits on behalf of the Government and receive a portion of the proceeds of any settlement or judgment.
David Sanford, Chairman of Sanford Heisler Kimpel, LLP, said today’s settlement provides further affirmation of the key role whistleblowers play in ensuring transparency in government procurement at every level. “Relators like Monique Gipson are vital to the honest purchase of goods and services by government entities in healthcare and other important sectors,” Sanford said. “Every U.S. citizen owes Monique a debt of gratitude for ensuring their hard-earned tax dollars are not squandered on products or services that are tainted by illegal kickbacks and other fraudulent conduct.”
Pathway Genomics is one of many new healthcare technology companies that provide laboratory-based genetic screening tests for a variety of conditions including somatic and hereditary cancers, cardiac health, diet and weight loss, carrier screening, as well as for estimating drug response to medications used in managing pain and treating mental illnesses. The company marketed its tests to doctors whose patients were covered by Medicaid, Medicare, and other federal and state government-funded health programs, including the Department of Defense’s TRICARE insurance program, and the Veteran Health Administration.
According to the qui tam civil action filed by Gipson in April 2014, Pathway violated its contracts with the federal government, the states and the District of Columbia by offering physicians and medical groups a reimbursement program that induced and rewarded them for referring their patients to Pathway to receive genetic testing. Such reimbursements, inducements and rewards explicitly violate the federal Anti-Kickback Statute and other applicable federal and state laws and regulations. Today’s settlement repays the government entities for services they had been fraudulently billed and paid as a result of the illicit kickbacks.
“Monique has helped the federal and state government recover millions of dollars in fraudulent payments to Pathway Genomics,” said Ross Brooks, Co-Chairman of Sanford Heisler Kimpel’s national Whistleblower Practice. “As a result of the improper remuneration paid through this illegal kickback scheme, the company submitted hundreds of false and non-reimbursable claims for payments based on prohibited referrals to Medicaid, Medicare and other government programs. Monique has done a tremendous service to taxpayers by recognizing and promptly reporting Pathway’s illegal kickback scheme to federal and state officials.”
The states involved in today’s agreement included: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia, Washington, Wisconsin, as well as the District of Columbia.
This is the third significant False Claims Act matter settled by Sanford Heisler Kimpel, LLP in 2015. In January 2015, the firm announced a $65 million qui tam settlement with Office Depot for engaging in an illegal pricing scheme under numerous government procurement contracts. In April, the firm announced a $4.4 million qui tam settlement with Medtronic Inc. for violating the United States Trade Agreements Acts.
About Sanford Heisler Kimpel
Sanford Heisler Kimpel, LLP is a public interest class-action litigation law firm with offices in New York, Washington, D.C., San Francisco and San Diego, specializing in civil rights and general public interest cases, and representing plaintiffs with whistleblower, employment discrimination, labor and wage violations, predatory lending, consumer fraud, and other claims.
Sanford Heisler Kimpel has a stellar history of success in qui tam, or whistleblower, cases brought under the False Claims Act, including representing whistleblowers in a $124 million qui tam settlement with Omnicare, Inc.; a $762 global qui tam settlement with Amgen, Inc.; and a $23.5 million dollar qui tam settlement with Medtronic, with the assistance of the U.S. Department of Justice. In addition, Sanford Heisler Kimpel has filed more than 20 other whistleblower actions now pending throughout the United States, and is currently investigating and drafting additional matters nationwide.
Along with a focus on the False Claims Act and other whistleblower cases, Sanford Heisler Kimpel also represents individuals in employment disputes and has achieved particular success in the representation of executives in such litigations. For example, the firm secured the largest jury award in U.S. history in an employment discrimination case, winning more than $250 million for 7,000 female employees at Novartis Pharmaceuticals Corporation in 2010.