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New York Testing Facility Settles Fraud Lawsuit for $2.5M

NEW YORK – The US Department of Justice announced on Wednesday that diagnostic testing facility Balance Diagnostics USA will pay $2.5 million to settle allegations of False Claims Act violations related to kickbacks. 

According to the DOJ, the Cedarhurst, New York-based facility paid kickbacks to physicians and their medical practices in the form of sham "rent payments" to gain patient referrals. Balance Diagnostics is alleged to have paid hundreds of thousands of dollars to more than 100 clinicians in the New York City area from 2009 to 2019 to refer patients for diagnostic testing services performed by the firm's staff at the providers' offices. Balance Diagnostics provides on-site mobile diagnostic testing services, including ultrasound procedures and video steganography. 

The government alleged that the rent payments were based on the number of patient referrals and were "well above the fair market rental value of the leased office space," the DOJ said in a statement. Balance Diagnostics will pay the US government $1.7 million and has accepted responsibility for the conduct alleged in the complaint. It also agreed to pay the state of New York $774,150 to resolve state law claims.