A New Jersey doctor recently admitted to accepting bribes in exchange for diagnostic test referrals. The doctor pleaded guilty in Federal Court in New Jersey in the latest development in the investigation and prosecution of the long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, NJ.
BLS allegedly bribed numerous physicians through leasing, service, and consulting agreements. As stated by the U.S. Attorney for the District of New Jersey:
“Under the lease and service agreements, between 2006 and 2009, physicians were frequently paid thousands of dollars a month by BLS for space in medical offices that BLS did not need or actually use and to perform routine blood drawing services that had little real dollar value.”
To date, twenty-one individuals, including employees or associates of BLS as well as ten physicians, have pled guilty in connection with the bribery scheme. The recent guilty plea further demonstrates the exposure all players face in the referral relationship. Specifically, this highlights the exposure referring physicians can face when they receive remuneration in connection with their referrals of business. The physician’s bribery count carries a maximum potential penalty of five years in prison and a $250,000 fine.
How do Providers Avoid Violation of the AKS?
Frier Levitt has always advised our healthcare clients, when entering into any leasing, or subleasing arrangements, which also involve a referral relationship, to comply with the Office of the Inspector Generals (OIG) Space Rental Safe Harbor. The Safe Harbor provides explicit criteria, which if met, affords the healthcare provider protection against an Anti-Kickback Statute prosecution.
Additionally, we have been made aware that some payors have begun to question the medical necessity of the labs ordered by physicians who had relationships with BLS. Conceivably, the payors may attempt to demonstrate that the lab tests were not reasonable and necessary and were only ordered due to the physician’s relationship with BLS. The payor will likely attempt to recoup monies paid related to the questionable tests.
What Should I do If I Have a Contract with a Referral Source?
If you have any contracts with Biodiagnostic, or any laboratory, imaging, or other healthcare provider, including another physician, you should have the contracts reviewed by a qualified healthcare attorney. Frier Levitt has advised clients on hundreds of these transactions and we are available to assist. Contact us today to speak to an attorney.
