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Quest Diagnostics and LabCorp Report Major Data Breaches Caused by a Business Associate

Quest Diagnostics (Quest) and LabCorp each reported in their respective 8-K filings with the Security and Exchange Commission that the companies had been notified by American Medical Collection Agency (AMCA), a billing collections vendor, that between August 1, 2018 and March 30, 2019 an unauthorized user had access to AMCA's system that contained information that AMCA had received from both companies. The number of affected individuals is estimated to be...

OIG Issues Fraud Alert Related to Genetic Testing Scam

The Office of the Inspector General for Health and Human Services (OIG) recently issued a Fraud Alert to the public identifying a fraud scheme involving genetic testing. To reduce fraud and abuse in federal health care programs, including Medicare and Medicaid, the OIG actively investigates potentially fraudulent schemes that are used to obtain money from these programs and, when appropriate, issues alerts that identify practices that are potentially fraudulent. This Alert...

24 Indicted in Telemedicine Fraud Scheme

Twenty-four individuals have been charged in a health care fraud scheme that resulted in a $1.2 billion loss to federal health care programs. The charges target those involved in a conspiracy affecting Medicare beneficiaries. Call centers were used to generate beneficiary leads, each of whom was promised free or low-cost durable medical equipment. The call centers then submitted kickbacks to telemedicine companies to facilitate the issuance of a DME order...

Recent DOJ Complaint Targets Hospital’s Compensation Arrangements with Physicians

On March 25, 2019, the U.S. Department of Justice (DOJ) filed a 49-page, multi-count complaint in Pennsylvania federal court against Wheeling Hospital in West Virginia, citing the hospital’s payments to physicians as violating the Anti-Kickback Statute, Stark Law and False Claims Act (FCA). The alleged fraud scheme includes, but is not limited to, incentive compensation paid to physicians employed by the hospital and suspect equipment rental arrangements with a radiology...

FDA Takes Action on Compounding, Including on Both 503A and 503B Compounding

On February 15, 2019, the Federal Food and Drug Administration (FDA) issued a final rule specific to section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act) regarding the list of bulk drug substances that can be used to compound drug products in accordance with section 503A of the FD&C Act. The rule becomes effective March 21, 2019.  Under Section 503A of the FD&C Act in order to...