CA Lab Pays $3 Million to Settle FCA Case

On October 2, the U.S. Department of Justice (DOJ) announced that Phamatech, Inc. and its CEO have agreed to pay $3,043,484 to settle alleged False Claims Act (FCA) allegations. San Diego-based Phamatech, a medical technology company that manufactures diagnostic devices and provides laboratory testing, allegedly submitted false claims to Medicare for drug-testing services.

In addition to the FCA claims, the DOJ alleged that Phamatech violated the federal Anti-Kickback Statute by paying per-specimen fees to Imperial Valley Wellness, a medical clinic, to induce it to refer urine samples of its Medicare patients to Phamatech for drug testing. Much of the testing was also allegedly not medically necessary, making it ineligible for Medicare reimbursement.

The allegations were originally brought in a qui tam suit filed under the FCA by a former Phamatech employee. The whistleblower will receive $517,392 from the settlement proceeds.

This post was written by Joseph P. DiBella, a law school graduate who is not yet admitted to the New York State Bar.