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Sept. 27, 2022

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Molecular Testing Labs of Vancouver settles in federal probe for up to $1.8 million

By , Columbian Business Editor

Molecular Testing Labs, a Vancouver toxicology and genetic testing laboratory, has agreed to pay up to nearly $1.8 million to settle allegations that it violated the False Claims Act by paying illegal kickbacks to obtain referrals from government health care insurance programs, the U.S. attorney’s office in Seattle announced Wednesday.

“The False Claims Act and Anti-Kickback Statute are aimed at making sure taxpayers get value for their money,” U.S. Attorney Annette L. Hayes said in a news release. “Those who try to game the system will be held accountable. This settlement sends a clear message that those doing business with government healthcare programs are being scrutinized to ensure they are not engaging in illegal side deals that harm government healthcare systems.”

Molecular Testing Labs disagrees with the government’s findings and admits no wrongdoing but agreed to a settlement to avoid continuing legal fees that had exceeded “hundreds of thousands of dollars,” Dave DeLong, Molecular Testing Labs’ head of finance and compliance, said in an interview with The Columbian.

“The settlement was a way for us to quit spending so much in legal fees and resources and put it behind us,” DeLong said.

DeLong said the company cooperated with the government throughout the course of the three-year investigation, providing documents and access to employees.

In a written statement to the newspaper, DeLong said, “Like many health care providers subject to government oversight, Molecular chose to enter into a settlement in an effort to put this matter behind us, to end the uncertainty associated with it, and to stop spending our valuable resources on it.

“Molecular Testing Labs maintains a comprehensive Compliance and Ethics Program and goes to great lengths to conduct business with the highest level of transparency and integrity. We’re happy to move on from it and focus our resources on the customers who use our established products and services. This also allows us to move forward with the continued rollout of items in our development pipeline.”

According to the settlement, between August 2014 and July 2015, the United States claims Molecular Testing Labs made payments to local laboratories in exchange for referrals of Medicare and Tricare program business, in violation of the Anti-Kickback Statute. The United States further claims that by submitting claims for payment to Medicare and Tricare based on those illegal referrals, Molecular Testing Labs violated the False Claims Act.

Medicare is the federal health insurance program for people who are 65 or older. Tricare provides civilian health benefits for U.S. Armed Forces military personnel, military retirees, and their dependents.

Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services, the government said in the news release. The False Claims Act and the Anti-Kickback Statute function, in part, to discourage such behavior.

“Kickbacks intended to gain government program business amount to little more than thinly-veiled bribes,” Steven J. Ryan, special agent in charge of the Office of Inspector General for the U.S. Department of Health and Human Services, said in the news release.

“Every year, fraudulent medical claims cause immeasurable damage to U.S. taxpayers by wrongly inflating health care costs,” Special Agent in Charge Chris D. Hendrickson, Defense Criminal Investigative Service, Western Field Office, said in the news release. “The announced settlement between the U.S. Government and Molecular Testing Labs is a victory for the U.S. taxpayer, and representative of DCIS and our law enforcement partners’ commitment to aggressively pursue those who attempt to defraud the U.S. military’s health care program and other health care programs in order to ensure the health care system works for U.S. military personnel and their families.”

Molecular Testing Labs, a wholly owned subsidiary of Blackfly Investments, LLC, remains in separate litigation with the Centers for Medicare & Medicaid Services concerning potential overpayment of claims. Depending on the outcome of that litigation, the ultimate settlement in this case could be between $180,000 and $1,777,738, the news release said.

The government was alerted to the alleged wrongdoing, a U.S. attorney spokesperson said, through a complaint to a Department of Health and Human Services hotline: 1-800-HHS-TIPS (1-800-447-8477).

Columbian Business Editor

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