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Biotech Testing Company to Pay $49 Million to Settle Allegations for Fraudulent Billing and Kickback Practices

PROGENITY, INC. (“PROGENITY”), a San Diego-based biotechnology company that provides molecular and diagnostic tests agreed to a $49 million settlement for fraudulent billing and kickback practices. The settlement resolves claims that the biotechnology company fraudulently billed federal healthcare programs for prenatal tests and provided kickbacks to physicians to persuade them to order PROGENITY tests for their patients. The lawsuit alleges that PROGENITY overbilled Medicaid and the VA by fraudulently using a billing code that misrepresented the tests being provided as well as the company providing illegal kickbacks to physicians in the form of meals, happy hours and the improper reduction or waive of patient co-insurance and deductible payments.

Acting U.S. Attorney Audrey Strauss said: “Progenity received millions of dollars from federal healthcare programs through its fraudulent billing and kickback schemes.  The company misrepresented the tests it performed and tried to get doctors to order Progenity tests by paying them excessive fees and providing meals and happy hours for them and their staff.  Our Office will continue to hold healthcare providers accountable when they engage in fraud and other illegal conduct.”

Under the settlement approved on July 23, 2020, PROGENITY will pay $19,449,316 to the United States to resolve kickback and fraudulent billing claims. The company has also agreed to pay $13,150,684 to various states to resolve these claims. In addition, PROGENITY has agreed to pay $16.4 million to resolve similar fraudulent billing claims related to TRICARE and the Federal Employees Health Benefits Program through a separate civil settlement.

In connection with this settlement, the Government joined a private whistleblower lawsuit that had been previously filed under the False Claims Act, which alleged that PROGENITY engaged in illegal kickback schemes.

HHS-OIG Special Agent in Charge Scott J. Lampert said: “Kickbacks and fraudulent billing schemes undermine the integrity of our healthcare system, compromise patient care, and increase the financial burden on taxpayers.  Along with our law enforcement partners, HHS-OIG will continue to ensure that those billing federal health insurance programs do so in an honest manner.” 

© 2020 by Tycko & Zavareei LLPNational Law Review, Volume X, Number 241


About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...