NEW YORK – The US Department of Justice announced last week that Metric Lab Services and Metric Management Services (collectively, Metric) and Spectrum Diagnostic Labs and two of their owners and operators, Sherman Kennerson and Jeffrey Madison, have agreed to pay $5.7 million to resolve fraud allegations.
According to DOJ, Metric and Spectrum, based, respectively, in Mississippi and Tennessee, and Kennerson and Madison operated a fraudulent genetic testing scheme in which marketers solicited genetic testing samples from Medicare beneficiaries, arranged for doctors to declare the genetic tests medically necessary, and then had the testing done by Metric and Spectrum.
The labs billed Medicare for the testing and then paid a portion of the reimbursement to the marketers. DOJ alleged that to hide these kickbacks, Metric and Spectrum entered sham agreements with the marketers for various consulting, marketing, and other services.
The claims resolved by the settlement are allegations only. Kennerson and Madison previously pled guilty to one count of conspiracy to defraud the US in connection with the genetic testing scheme and are awaiting sentencing.
"Laboratories that attempt to profit from unlawful kickbacks will be held accountable," Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department's Civil Division, said in a statement. "The department will continue to pursue those who undermine the integrity of federal health care programs and waste taxpayer dollars."
Last year, healthcare executive Norman Smiley, the owner of Sun Health Advocates, admitted to receiving kickbacks from Metric and Spectrum in exchange for providing DNA samples and genetic test orders.