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Progenity Resolves US DOJ Billing, Past Practice Investigations for $35.8M

NEW YORK – Newly public diagnostic firm Progenity announced Thursday it has settled with the US Department of Justice and the US Department of Health and Human Services to resolve allegations of improper business, promotional, and billing practices.

Under the agreement, the company will pay $35.8 million to settle the federal complaints and won't be prosecuted by the DOJ. Progenity also expects to pay an additional $13.2 million to various state attorneys general to resolve additional claims.

According to a statement from the DOJ, Progenity admitted to overbilling Medicaid and the US Department of Veterans Affairs by using a fraudulent billing code to misrepresent noninvasive prenatal tests provided. The DOJ said it also offered kickbacks to doctors by paying excessive fees and providing food and alcohol for them, and waived and reduced copays and deductibles to sell its tests to doctors and patients.

The company is required to continue enhancing internal controls and its compliance program as part of the agreement. It must also retain an independent review board for the next five years to check the accuracy for the company's claims and monitor its arrangements with other businesses, the DOJ said.

In the past two years, Progenity has overhauled its compliance program by "engaging third parties to review our compliance policies and procedures, revamping internal controls to guarantee accurate and consistent coding, and changing our leadership team," CEO Harry Stylli said in a statement.