Press Release
☷Metric Lab Services Metric Management Services LLC Spectrum Diagnostic Labs LLC and Owners Agree to Pay $5 7 Million to Settle Allegations of False Claims for Unnecessary Genetic Testing
U.S. Department of Justice ( By Press Release office)
Jul 23,2022
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Metric Lab Services LLC and Metric Management Services LLC ( collectively , Metric ) and Spectrum Diagnostic Labs LLC ( Spectrum ) and two of their owners and operators , Sherman Kennerson and Jeffrey Madison , have agreed to pay $5 . 7 million to resolve allegations that they caused the submission of false claims to Medicare by paying kickbacks in return for genetic testing samples , the Department of Justice announced today . Metric and Spectrum were clinical laboratories in Mississippi and Texas , which Kennerson and Madison co - owned and operated along with other individuals . The United States alleged that Metric , Spectrum , Kennerson and Madison participated in a genetic testing fraud scheme with various marketers . These marketers solicited genetic testing samples from Medicare beneficiaries . The marketers arranged to have a physician fraudulently attest that the genetic testing was medically necessary , and Metric and Spectrum would process the tests , receive reimbursement from Medicare and pay a portion of that reimbursement to the marketers . In an attempt to conceal the nature of the kickback arrangement , Metric and Spectrum entered into sham agreements with marketers to provide various consulting , marketing and other services at an hourly rate . In reality , however , Metric and Spectrum paid the marketers a percentage of revenue , including Medicare reimbursement , in return for the samples . The marketers then generated sham invoices for hourly services that matched the agreed - upon kickback amount . “Laboratories that attempt to profit from unlawful kickbacks will be held accountable , ” said Principal Deputy Assistant Attorney General Brian M . Boynton , head of the Justice Department’s Civil Division . “The department will continue to pursue those who undermine the integrity of federal health care programs and waste taxpayer dollars . ”“Rather than compete fairly for business , these labs engaged in a brazen kickback scheme to rake in millions of dollars of Medicare money , ” said U . S . Attorney Philip R . Sellinger for the District of New Jersey . “A patient’s needs must guide medical decisions , not who is paying the biggest kickback . Today’s settlement recoups millions of dollars for the Medicare program , and demonstrates this Office’s continuing resolve to protect the integrity of federal healthcare programs . ”“When health care providers engage in kickback schemes , the trust of both patients and taxpayers are at risk , ” said Special Agent in Charge Scott J . Lampert of the U . S . Department of Health and Human Services Office of Inspector General ( HHS - OIG ) . “This case shows our commitment to investigating such allegations in order to protect the Medicare program’s ability to subsist and serve its mission . ”Kennerson and Madison have previously each pled guilty to one count of conspiracy to defraud the United States in connection with this scheme and are awaiting sentencing . United States v . Kennerson , No . 20 - cr - 00448 ( BRM ) and United States v . Madison , No . 20 - cr - 00449 ( BRM ) ( D . N . J . ) . The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division , Commercial Litigation Branch , Fraud Section , and the U . S . Attorney’s Office for the District of New Jersey , with assistance from HHS - OIG . The matter was handled by Trial Attorney J . Jennifer Koh and Assistant U . S . Attorney Andrew A . Caffrey III for the District of New Jersey . The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud . One of the most powerful tools in this effort is the False Claims Act . Tips and complaints from all sources about potential fraud , waste , abuse and mismanagement can be reported to the Department of Health and Human Services at 800 - HHS - TIPS ( 800 - 447 - 8477 ) . The claims resolved by the settlement are allegations only and there has been no determination of liability except to the extent admitted by Kennerson and Madison in their criminal pleas .
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