A South Carolina medical testing laboratory and its CEO have agreed to repay more than $6 million for allegedly paying kickbacks to doctors in return for boosting lab testing referrals. The settlement resulted from a civil lawsuit brought by a whistleblower.
Joseph Labash, who is from the United Arab Emirates, also agreed to plead guilty to five counts of paying kickbacks and to pay another $104,000 in restitution. He led Clinical Laboratory LTD Holding, formerly known as Labtech Diagnostics, based in Anderson, South Carolina, according to court filings and the U.S. Department of Justice.
Federal court records do not indicate if Labash will face prison time. But the Justice Department said the settlement agreement resolves allegations that Labash and Labtech knowingly paid five types of kickbacks to doctors, from 2018 through 2021. The payments were disguised as office space rental payments, phlebotomy and toxicology payments, and defrauded health insurance programs, DOJ noted.
“In addition to paying kickbacks, Labtech also failed to accurately calibrate and perform quality controls on its testing equipment,” the lawsuit complaint reads. “These labs then submitted claims to Medicare for reimbursement for the testing performed, to Medicaid, and to other federal health insurance programs.”
The whistleblower, a former chief operating officer at Labtech, will receive almost $1.4 million of the settlement proceeds, the department said. Prosecutors previously resolved allegations that health care providers in South Carolina, North Carolina, Texas, and Illinois received kickbacks to induce their laboratory referrals to Labtech.
Others involved with the lab were also named in the initial lawsuit. The amended complaint in the case can be seen here.
Topics South Carolina
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