Health Diagnostic Laboratory, along with another lab, paid nearly $50 million to the government this year to settle allegations that it improperly paid doctors for referrals.
But for the company's former leader, the story was just beginning.
After the settlement, the government accused former Health Diagnostic Laboratories CEO Latonya Mallory and others of violating the False Claims Act and anti-kickback statute.
A memo distributed Sept. 9 shows the government may be getting serious about pursuing healthcare executives tangled in fraud allegations.
U.S. Deputy Attorney General Sally Quillian Yates said companies must now disclose “all relevant facts relating to the individuals responsible for the misconduct” in order to qualify for “cooperation credit”—less severe penalties in exchange for cooperating with the Justice Department.
Yates called the new requirement “a substantial shift from our prior practice,” in a speech.
Experts say the move could help the government in its perpetual fight against healthcare fraud.
“If they do follow the new guidelines, it could very well be a sea change in the way healthcare companies conduct their business, and how healthcare companies ramp up their internal compliance,” said Marc Raspanti, a partner at Pietragallo Gordon Alfano Bosick & Raspanti, who represents whistle-blowers and is a former government prosecutor. He noted, however, that this isn't the first time the government has said it would go after individuals.