Cordant Health Solutions agreed to pay nearly $12 million to settle allegations that it paid kickbacks to boost its urine testing business, the U.S. Justice Department said Monday.
Denver-based Cordant allegedly paid millions of dollars to Northwest Physicians Laboratories and Genesis Marketing Group from 2013 to 2015 in exchange for referrals of urine tests that were funded by federal healthcare programs. The settlement, which stemmed from a 2015 whistleblower lawsuit, specifically applies to two Cordant operated labs: Sterling Reference Laboratory in Tacoma, Wash., and Forensic Laboratories in Denver.
"This is the largest civil settlement in the illegal kickback scheme involving Northwest Physicians Laboratories," Tessa Gorman, first assistant U.S. attorney, said in prepared remarks. "The False Claims Act and Anti-Kickback Statute work together to make sure medical providers don't cut side deals that line their pockets, but fail to provide value for taxpayers."
Cordant, which did not admit any wrongdoing, entered into a corporate integrity agreement with HHS' Office of Inspector General as part of the settlement, requiring independent oversight of its business over the next five years.
"Cordant is pleased to reach a resolution of the investigation and looks forward to continuing to put patient care first and provide innovative tools for monitoring and managing behavioral health and chronic pain patients through our unique programs," Sue Sommer, CEO and president of Cordant, said in a prepared statement. "At the same time, we will maintain our historical commitment to conduct our activities according to the highest ethical standards and to follow our comprehensive compliance program."
Prosecutors have been cracking down on lab testing schemes, particularly ones involving urine samples, that have drained millions from federal healthcare programs. COVID-19 might lead to more fraud as hospitals look to recoup lost revenue quicker, legal experts said.
Northwest Physicians Laboratories and three executives were indicted in December for conspiracy to pay and solicit kickbacks in their dealings with various urine testing labs. Trial in the criminal case is set to begin Feb. 1, 2021.