Piedmont Pathology Settles Kickback Scheme Allegations at $500K

The Department of Justice announced on Monday, November 30 that Piedmont Pathology Associates, Inc. and Piedmont Pathology, P.C. have agreed to pay the U.S. government $500,000 to resolve allegations of False Claims Act violations. The former Piedmont Pathology contract employee whose initial lawsuit prompted the investigation is set to collect a whistleblower award of $75,000, plus costs and attorney’s fees.

Piedmont Pathology Settles Kickback Scheme Allegations at $500K

Diagnostics Group Offered Electronic Medical Record (EMR) Software For Referrals

Initial claims were filed by a former contract salesperson for the North Carolina-based diagnostic anatomic pathology group when she noticed they were providing Electronic Medical Record (EMR) software licenses to physicians in return for specimen referrals.

The Department of Justice confirmed that Piedmont Pathology was offering nine practicing physicians’ offices expensive EMR software licenses for free or at substantially discounted prices. These offers were made at or around the same time the parties entered into referral contracts for pathology lab specimens.

Claims submitted for government healthcare funds in violation of the Anti-Kickback Statute are in turn violations of the False Claims Act. Under the False Claims Act, the government is entitled to seek three times the actual damages (treble damages) plus penalties of up to $11,000 per false claim. Piedmont Pathology Associates, Inc. and Piedmont Pathology P.C. agreed to pay $500,000 to resolve the kickback scheme allegations.

Kickbacks Alter Physician Judgement on Proper Patient Care

United States Attorney for the District of South Carolina Bill Nettles said, “Financial relationships between physicians for referrals can alter a physicians’ judgment as to what’s necessary and appropriate for a patient.  Our goal in this settlement was not only to recover money for improper healthcare claims, but to deter similar conduct and, in turn, promote health care affordability.”

Ex Piedmont Pathology Salesperson Collects $75K Whistleblower Award

The qui tam provision of the False Claims Act allows individuals to file lawsuits on behalf of the government when allegations of government fraud are involved.  Whistleblowers are entitled to share in anywhere form 10-30% of the total recovery amount. The former employee of Piedmont Pathology was granted a whistleblower award of 15% of the recovery ($75,000), costs and attorney’s fees for bringing these allegations to light.

“Paying for referrals, as the government alleged, is little more than a thinly veiled bribe,” stated Derrick Jackson, Special Agent in Charge with the Office of Inspector General, U.S. Department of Health and Human Services.  “Patients and taxpayers deserve better, and those who would defraud the system should expect to pay for their schemes.”

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