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New Jersey Lab, CEO to Pay $13.2M to Settle Allegations of False Claims

NEW YORK – The US Department of Justice said on Wednesday that clinical laboratory RDx Bioscience and its CEO have settled on allegations that they violated the federal False Claims Act by receiving illegal kickbacks and ordering unnecessary lab tests.

As part of the settlement, RDx Bio and its CEO Eric Leykin will pay $10.3 million to the US and another $2.9 million to the state of New Jersey, which jointly funded claims paid by the New Jersey Medicaid program.

The defendants will also cooperate with DOJ investigations of other participants in the alleged schemes.

According to the DOJ, the settlement resolves allegations involving five types of kickbacks made to induce referrals to Kenilworth, New Jersey-based RDx Bio. Between 2018 and 2022, RDx and Leykin are alleged to have paid commission "based on the volume and value of Medicare and Medicaid referrals to independent contractor marketers to arrange for and recommend that healthcare providers order RDx laboratory tests."

Also, between 2018 and 2022, RDx marketer Corum Group allegedly paid providers thousands of dollars in management service organization payments disguised as investment returns, when in actuality, the payments were inducements to providers to order RDx lab tests.

Additionally, from 2017 to 2023, RDx marketers BeauMed Consultants and Ralston Health Group allegedly paid providers thousands of dollars disguised as consulting and medical director fees that were, in fact, payments to induce RDx lab test orders, among other things, the DOJ said.

The DOJ also alleged RDx marketer Seaworthy Recovery Services paid thousands of dollars in kickbacks to at least one principal of certain substance abuse recovery centers in return for referrals for RDx lab tests.

Lastly, RDx and Leykin are alleged to have paid specimen collection fees to staff members of referring providers to induce them to order RDx lab tests, according to the DOJ.

The settlement resolves allegations that RDx and Leykin billed or caused Medicare and Medicaid to be billed for the tests, knowing they paid the kickbacks or knew of them.

The DOJ added that from 2017 to 2023, RDx and Leykin allegedly submitted or caused false claims to be submitted to Medicare and Medicare for unnecessary or unreasonable lab tests, or test that were not covered.