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Lab Firm Phamatech Pays $3M to Settle Medicare Fraud Case

NEW YORK – The US Department of Justice said on Friday that San Diego-based lab company Phamatech and its CEO and founder, Tuan Pham, have agreed to pay more than $3.0 million to settle allegations that they submitted false claims to Medicare for drug testing.

The government alleged that Phamatech paid the medical clinic Imperial Valley Wellness (IVW) to refer drug testing to Phamatech, which then received Medicare payments for that testing, violating the federal Anti-Kickback Statute and the False Claims Act.

According to the government, Phamatech paid IVW a per-specimen fee for referrals of urine specimens from Medicare beneficiaries and that many of the tests performed on the samples were not medically necessary.

The allegations were originally made by a former employee of Phamatech, John Polanco, who brought them under the whistleblower provisions of the False Claims Act. He will receive $517,392 from the settlement proceeds.

The investigation was conducted by the U.S. Attorney’s Office for the Southern District of California, the US Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation.

The government noted that the claims resolved by the settlement are only allegations, and that there has been no determination of liability.