Texas Laboratory, Former CEO, and Florida Businessman Pay $36.4 Million to Settle Health Care Fraud Allegations

ATLANTA – Access DX Laboratory (“Access DX”), its former CEO Michael Stewart, and Florida businessman Harold Shatz will pay a combined total of $36.4 million to resolve allegations that they violated the False Claims Act by paying kickbacks and billing Medicare and Medicaid for medically unnecessary genetic testing. “This settlement sends a clear message that we will not tolerate fraudulent schemes that waste taxpayer dollars and undermine trust in our medical system,” said U.S. Attorney Theodore S. Hertzberg. “We will aggressively pursue any provider or entity that seeks to exploit federal programs through excessive billing and illegal kickbacks.” “Healthcare referrals must reflect the best decision for patients, not the influence of kickbacks,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “This resolution demonstrates the Department’s commitment to hold accountable both corporations and individuals who profit from improper kickback arrangements and who burden federal healthcare programs with claims for medically unnecessary services.” “Kickbacks and medically unnecessary genetic testing schemes not only drain taxpayer-funded federal health care programs, but undermine the integrity of our U.S. health care system and drive up health care costs for all of us,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”). “HHS-OIG will continue to work with our law enforcement partners to aggressively pursue health care fraud and protect Medicare, Medicaid, and the people who rely on them.” The government’s investigation arose after a whistleblower filed a complaint alleging that, from January 2018 through January 2020, Access DX, a laboratory based in Houston, Texas; Stewart; and Shatz paid kickbacks to marketers in return for referrals of patients for genetic testing, unbundled billing codes for genetic testing, paid telemedicine providers for false and fraudulent doctors’ orders, and submitted and caused the submission of false claims for genetic testing. Based on this conduct, Shatz and Stewart pleaded guilty in the United States District Court for the Southern District of Texas to conspiracy to defraud the United States and to pay and receive health care kickbacks. The $36.4 million civil settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia under the qui tam or whistleblower provisions of the False Claims Act, U.S. ex rel. Green v. Access DX Lab LLC, et al. , No. 1:19-cv-2845. In connection with its settlement, Access DX entered into a five-year Corporate Integrity Agreement (“CIA”) with HHS-OIG. The CIA requires Access DX to implement auditing and accountability provisions, including implementation of a robust compliance program, training and education requirements, and a review of arrangements with referral sources. Except to the extent admitted by Stewart and Shatz in their plea agreements, the claims resolved by the settlement are allegations only, and there has been no determination of liability. Under the False Claims Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government. Douglas Green, the whistleblower and president of a Massachusetts marketing company hired to market genetic testing to Medicare and Medicaid beneficiaries, will receive $7.2 million from the settlement. The investigation and resolution of this matter were handled by Northern District of Georgia Assistant U.S. Attorney Neeli Ben-David and Senior Litigation Counsel Laurie A. Oberembt of the Justice Department’s Civil Division, with substantial assistance from HHS-OIG. This year, the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Department of Justice’s FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Department’s FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement affecting federal health care programs can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477). For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6185. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga .