NeoGenomics pays $10 million to settle kickback allegations after self-disclosing below-market deals

NeoGenomics Laboratories, located in Florida, has agreed to pay $9,813,260 to resolve allegations that it violated the False Claims Act by providing below-fair-market-value consulting services to certain health care providers that referred beneficiaries to NeoGenomics for laboratory testing services and by paying variable referral-based compensation to independent consultants to identify health care providers that could refer patients to NeoGenomics.

In connection with the settlement, the United States acknowledged that NeoGenomics took significant steps entitling it to credit for cooperating with the government’s investigation.

The United States alleged that, as part of NeoGenomics’ Laboratory Clinical Initiative (LCI) programme, NeoGenomics provided laboratory consulting services to 28 health care providers seeking to establish in-house flow cytometry and Fluorescence In-Situ Hybridisation (FISH) laboratory diagnostic capabilities.

It contended that NeoGenomics provided certain services for less than fair market value to induce the referral of clinical laboratory tests to NeoGenomics in violation of the Anti-Kickback Statute (AKS) and that the financial relationship and resulting submission of claims violated the Stark Law.

The U.S. government further alleged that NeoGenomics entered into agreements with independent consultants that involved payments to those consultants in exchange for identifying potential health care provider customers for NeoGenomics’ laboratory services.

Ied contends that the payments to the independent consultants to identify potential customers varied in part on the volume or value of referrals to NeoGenomics from those customers.

NeoGenomics self-disclosed this conduct to the United States. In addition, NeoGenomics cooperated with the government’s investigation. They took remedial measures, including ending the consulting agreements at issue, terminating responsible employees, and providing the United States with a thorough self-disclosure and supplemental information to assist the United States in its investigation.

“Federal law prohibits paying remuneration to induce referrals of federal health care services, including by offering services at below fair market value,” said assistant attorney general Brett A. Shumate of the Justice Department’s Civil Division. “We encourage companies to self-disclose improper remuneration and cooperate with our investigations in order to mitigate the consequences of prior conduct.”

“Providing services below fair market value to drive referrals — as alleged here — undermines independent medical judgment,” said acting deputy inspector-general for investigations Miranda L. Bennett of HHS‑OIG. “The Self‑Disclosure Protocol remains an important tool for bringing potential violations to light and ensuring they are addressed appropriately.”