Bostwick Laboratories Settles Whistleblower Claim Involving Illegal Physician Inducements

Wednesday, August 28, 2013
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Bostwick Laboratories (Bostwick) will pay the government $503,668 to settle whistleblower allegations that the company made illegal payments to induce physicians to utilize Bostwick’s laboratory testing services, according to a press release from the Department of Justice (DOJ) on August 20, 2013. The government claims Bostwick would bill Medicare and Tricare for testing services were not medically necessary. The whistleblower case was filed in the Eastern District of New York.

To read the press release from the DOJ, click here.

Bostwick has offices and laboratories in Uniondale, New York, Orlando, Florida, and Glen Allen, Virginia.


Bostwick Accused of Illegally Paying Physicians to Use Laboratories.

The government alleges that Bostwick made the illegal payments to physicians to induce them to enroll their patients in a study sponsored by Bostwick. The study was called “Determination of the Accuracy of PCA3Plus Urine Assay for the Detection of Prostate Cancer” (the PCA3Plus Study). The study required that for each patient enrolled, the physicians were obligated to send both the PCA3Plus Study and prostate biopsy samples - which otherwise could have been sent to any laboratory - to Bostwick for analysis. As a result, Bostwick paid those physicians to send business to its laboratories. Bostwick then submitted claims to Medicare and Tricare for reimbursements for lab services that were medically unnecessary, according to the DOJ.


Whistleblower Tips off Government.

According to the DOJ, the investigation that led to the settlement started after Bostwick asked a urologist to participate in the PCA3Plus Study. The urologist then filed a whistleblower complaint against the company. To learn more on whistleblower cases, read our two-part blog. Click here for part one, and click here for part two.


Bostwick Releases Statement on Settlement Agreement.

In settling this matter, Bostwick has not admitted any wrong doing. According to The Pathology Law Blawg, Bostwick released a statement that, in part, says:

“Bostwick Laboratories will pay $503,668 to settle the civil investigation. While the company disagrees with and does not admit to the government’s civil allegations, it agreed to the settlement to put the matter behind it and to avoid the delay, uncertainty, and expense of protracted litigation.”

To read the entire Bostwick statement from The Pathology Law Blawg, click here.


Most Qui Tams Filed by Doctors, Nurses and Employees.

From our review of qui tam cases that have been unsealed by the government, it appears most of these are filed by physicians, nurses or hospital staff employees who have some knowledge of false billing or inappropriate coding taking place. Normally the government will want to see some actual documentation of the claims submitted by the hospital or other institution. Usually physicians, nurses or staff employees have access to such documentation. Whistleblowers are urged to come forward as soon as possible. In many circumstances, documentation that shows the fraud “disappears” or cannot be located once it is known that a company is under investigation.


Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases both in defending such claims and in bringing such claims. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters. We have represented doctors, nurses and others as relators in bringing qui tam or whistleblower cases, as well.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Comments?

Individuals working in the health care industry often become aware of questionable activities. Often they are even asked to participate in it. In many cases the activity may amount to fraud on the government. Has this ever happened to you? Please leave any thoughtful comments below.


Sources:

Department of Justice. “Bostwick laboratories, Inc. Pays $503,668 to Resolve Civil Fraud Allegations that its Sales Representatives used a Clinical Study to Induce Physicians to Utilize its Services.” Department of Justice. (August 20, 2013). From: http://www.justice.gov/usao/nye/pr/2013/2013aug20a.html

The Pathology Blawg. “Bostwick Laboratories Settles Whistleblower Allegations Involving Illegal Physician Inducements.” The Pathology Blawg. (August 23, 2013). From: http://pathologyblawg.com/pathology-news/pathology-vendors/bostwick-labs/bostwick-laboratories-settles-whistleblower-allegations-involving-illegal-physician-inducements/


About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.


Tag Words: qui tam, qui tam lawsuits, whistleblower, whistleblower attorney, whistleblower lawyer, whistleblower protection, Bostwick, Bostwick Laboratories, settlement agreement, inducing physicians, PCA3Plus Study, illegal inducements, defense attorney, defense lawyer, Department of Justice (DOJ), tricare, tricare fraud, tricare false billing, false billing, false claims, false claims act, legal representation, urologist, medicare, medicare audit, Medicare false claims, Medicare fraud, the health law firm, unnecessary procedures

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8/28/2013

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