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Labs to Pay Feds $1.5M to Settle Allegations of Improper Billing

NEW YORK (360Dx) – Federal authorities this week announced separate deals with diagnostic testing providers to settle allegations that they billed the government for unnecessary laboratory tests.

Under the terms of one deal, Poplar Healthcare will pay the US $897,640 to resolve allegations under the False Claims Act. Separately, Piedmont Pathology will pay the US $601,000 to settle allegations that it violated that legislation.

The US government had accused Poplar, through its subsidiary GI Pathology, of improperly billing the government for immunohistochemical mast cell tryptase stains that were medically unnecessary. The tests "were the subject of an extensive, multiyear promotional campaign designed to promote the use of the stain, claiming that Poplar could use the test to definitively diagnose a condition known as 'mast cell enterocolitis,'" the US Attorney's Office District of Rhode Island said in a statement.

The government alleged Poplar's promotion of the test was inconsistent with the approval requirements of the US Food and Drug Administration and was not supported by scientific evidence.

The federal government began its investigation into Poplar after Gordon Wang, a pathologist formerly employed by Poplar, sued the company on behalf of the US under the False Claims Act. Wang will receive $205,841 from the proceeds of the settlement.

The government's case against Piedmont stemmed from a lawsuit filed by former Piedmont pathologist Kim Geisinger on behalf of the US under the False Claims Act. The US became involved last November and pursued allegations that Piedmont billed the government for special stains used on certain gastric biopsies before a pathologist reviewed the routine hematoxylin and eosin stain.

H&E stains should be used before special stains, which are billed separately to the government, the US Attorney's Office Western District of North Carolina said in a statement.

Geisinger will receive approximately $120,200 from the recovery, the attorney's office added.