Federal settlement resolves fraud allegations involving kickbacks and unnecessary genetic testing claims.
Access DX Laboratory, a medical testing company based in Houston, Texas, along with its former chief executive and a Florida businessman, will pay a combined $36.4 million to settle claims that they took part in an illegal healthcare billing scheme involving genetic testing. Federal officials said the case involved improper payments for patient referrals, false medical orders, and billing government healthcare programs for tests that were not medically needed. According to the U.S. Department of Justice (DOJ), the alleged conduct took place in the two-year span between January 2018 and January 2020. During that time, prosecutors said the laboratory, former CEO Michael Stewart, and Florida businessman Harold Shatz paid marketers to send patients to the company for testing. Federal law generally bans payments made in exchange for patient referrals because medical decisions are expected to be based on a person’s health needs rather than financial rewards.
Investigators also claimed the group broke billing rules by separating genetic testing charges into multiple claims instead of billing everything together under a single claim. Additionally, telehealth providers were paid for doctors’ orders that were not based on proper medical judgment. Those orders were then used to bill Medicare and Medicaid for genetic testing that prosecutors said was not necessary.
Michael Stewart previously agreed to plead guilty to conspiracy involving fraud against the United States and healthcare kickbacks. Harold Shatz also agreed to plead guilty to the same conspiracy charge in a separate criminal case. Both men reached civil settlements connected to the False Claims Act at the same time they entered into plea agreements with the government. As part of this legal action, Access DX must also follow a five-year Corporate Integrity Agreement with the Office of Inspector General for the U.S. Department of Health and Human Services. Under that agreement, the company must strengthen its compliance program, provide employee training, conduct regular reviews, and closely monitor relationships with referral sources.
The initial federal investigation began after a whistleblower filed a lawsuit under the False Claims Act, which allows private citizens with knowledge of suspected fraud involving government funds to bring cases on behalf of the United States. If money is recovered, the whistleblower may receive part of the settlement. In this case, the whistleblower was Douglas Green, the president of a Massachusetts marketing company that had been hired to promote the company’s services to Medicare and Medicaid patients. Green will receive about $7.2 million from the total recovery.
The DOJ said the case involved close cooperation among several federal agencies, including the Civil Division, the U.S. Attorney’s Office for the Northern District of Georgia, and the Office of Inspector General for the Department of Health and Human Services. Federal authorities continue to pursue cases involving false billing, illegal referral payments, and other forms of healthcare fraud. These government investigations help protect Medicare and Medicaid funds from being misappropriated while helping to make sure healthcare decisions are unbiased and based on the individual needs of each patient instead of financial gain. This protects patients from receiving unnecessary care, which, in some cases, could do more harm than good.
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