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Verdicts & Settlements

Medical Companies Agree to Pay Millions to Settle FCA Allegations

— July 25, 2022

BioReference, acquired by OPKO, has resolved allegations of supplementing office space rent.

BioReference Health LLC, formerly known as BioReference Laboratories, Inc., and OPKO Health, Inc. have agreed to pay $9.85 million to resolve False Claims Act allegations over BioReference’s payment of “above market rents to physician landlords for office space in order to induce referrals from those physicians to BioReference,” according to the U.S. Department of Justice (DOJ). The False Claims Act (FCA) has been put into place to pursue justice against those who attempt to defraud the government.

“The integrity of federal health care programs depends on providers making decisions based on the interests of their patients,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the DOJ’s Civil Division. “The Department of Justice and its agency partners are committed to enforcing laws prohibiting illegal financial arrangements that may distort health care decision-making and drive up costs to federal health care programs and patients.”

Medical Companies Agree to Pay Millions to Settle FCA Allegations
Photo by Pavel Danilyuk from Pexels

The FCA complaint accused the defendants of making lease payments for doctors and physician’s groups in the seven-year span between January 2013 and March 2021 which exceeded what would be considered to be fair market value.  This is in violation of the Physician Self‑Referral Law and the Anti-Kickback Statute, which both were put into place to make sure medical judgments are not influenced by improper financial arrangement.

The Physician Self‑Referral Law (also known as Stark Law) specifically forbids healthcare providers from billing for “services referred by physicians with whom the provider has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions,” the law outlines.

The Anti‑Kickback Statute prohibits offering compensation to engage the referral of products or services “covered by Medicare, Medicaid and certain other federally funded programs,” court documents state.

Documents show further, “Following OPKO’s acquisition of BioReference, the companies conducted multiple internal audits that showed that the payments to the specified physician-lessors exceeded fair market value. BioReference did not report or return any overpayments to federal health care programs.”

“Medical decisions by doctors should be based on what is best for each patient, not a doctor’s personal financial interest,” said U.S. Attorney Rachael S. Rollins for the District of Massachusetts. “When companies violate the federal health care laws that are meant to protect patients, health care costs for hard working people increase. We will continue to find fraud and use the False Claims Act to make companies that break the law pay back the taxpayers they defrauded as well as pay a financial price for their misconduct.”

“This FCA settlement is a warning to laboratories that think they can boost their profits by entering into improper financial arrangements with referring physicians,” added Special Agent in Charge Phillip M. Coyne of the HHS-OIG. “Working with our law enforcement partners, we will continue to crack down on such deals, which work to undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.”


BioReference Laboratories and Parent Company Agree to Pay $9.85 Million to Resolve False Claims Act Allegations of Illegal Payments to Referring Physicians


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