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UTC Labs, Principals Agree to Pay $42.6M in PGx Testing Fraud Case

NEW YORK – The US Department of Justice said yesterday that UTC Laboratories, previously known as Renaissance Rx, has agreed to pay $41.6 million to settle allegations that they paid kickbacks for lab referrals for pharmacogenetic testing and for billing for tests that were not medically necessary.

The company also accepted a 25-year ban on participating in any federal healthcare program.

Additionally, company principals Tarun Jolly, Patrick Ridgeway, and Barry Griffith agreed to pay $1 million to resolve the allegations.

According to the government, between 2013 and 2017, UTC paid physicians to order unnecessary PGx tests that were billed to Medicare. The payments were made in return for the physicians' participation in a clinical trial for evaluating pharmacogenetic testing called the Diagnosing Adverse Drug Reactions Registry.

The company also made inappropriate payments including sales commissions as part of the kickback scheme.

The payments came to light via lawsuits filed under the whistleblower provisions of the False Claims Act, and the announced settlement resolves the claims in six whistleblower lawsuits pending in the United States District Court for the Eastern District of Louisiana.

"Healthcare fraud, in any incarnation, hurts patients, honest medical practitioners, and all of the nation’s taxpayers," United States Attorney Peter G. Strasser of the Eastern District of Louisiana said in a statement. "The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies, both civil and criminal, to address signs of waste and abuse by providers in our healthcare markets."