Biotech company agrees to $49 million fraud settlement
PROGENITY, INC. (“PROGENITY”), a San Diego-based biotechnology company providing molecular and diagnostic testing, has agreed to a $49 million settlement over fraudulent billing and kickback practices. The settlement resolves claims that the biotechnology company fraudulently billed federal health programs for prenatal testing and paid kickbacks to doctors to convince them to order PROGENITY tests for their patients. The lawsuit alleges that by fraudulently using a billing code that misrepresented the tests provided, PROGENITY illegally compensated Medicaid and the VA, as well as the company providing physicians with illegal kickbacks in the form of meals, happy hours, and improperly reducing or forgoing participation granted by patients, overcharged. Insurance and Deductibles.
Acting U.S. Attorney Audrey Strauss said: “Progenity has received millions of dollars in government health care programs through its fraudulent billing and kickback programs. The company misrepresented the tests it administered and tried to trick doctors into ordering progenity tests by paying them excessive fees and providing meals and happy hours for them and their staff. Our office will continue to hold healthcare providers accountable when they engage in fraud and other illegal conduct.”
Pursuant to the settlement approved on July 23, 2020, PROGENITY will pay US$19,449,316 to the United States to resolve kickback and fraudulent billing claims. The company has also agreed to pay $13,150,684 to various states to resolve these claims. In addition, PROGENITY has agreed to pay $16.4 million to resolve similar fraudulent billing claims related to TRICARE and the Federal Employees Health Benefits Program through a separate civil settlement.
In connection with this settlement, the government joined a private whistleblower complaint previously filed under the False Claims Act alleging that PROGENITY was involved in illegal kickback programs.
HHS-OIG Special Adviser Scott J. Lampert said, “Kickbacks and fraudulent billing systems undermine the integrity of our healthcare system, jeopardize patient care and increase the financial burden on taxpayers. Along with our law enforcement partners, HHS-OIG will continue to ensure those who bill for government health insurance programs do so honestly.”
© 2022 Tycko & Zavareei LLPNational Law Review, Volume X, Number 241