NEW YORK — Pathology laboratory Inform Diagnostics has agreed to pay the federal government $16 million for conducting unnecessary tests on biopsy specimens, the US Department of Justice said on Wednesday.
According to the department, the tests conducted by Inform resulted in false payment claims to Medicare and other federal health care programs.
The US Attorney's Office District of Massachusetts said that Inform, formerly called Miraca Life Sciences, admitted that from 2013 to 2018, it routinely and automatically conducted additional tests on biopsy specimens before a pathologist's review and without a determination those tests were needed. The DOJ said those tests were unnecessary and billing federal health programs for them constituted fraud.
Fulgent Genetics acquired Inform, based in Irving Texas, in April for $170 million.
According to the settlement agreement document, Inform conducted the additional tests without consulting the treating physicians or any pathologists' findings. In the agreement with the DOJ, Inform officials admitted to routinely conducting periodic acid-Schiff-Alcian Blue and immunohistochemical stains on gastrointestinal biopsy specimens and periodic acid-Schiff stains on dermatological biopsy specimens.
In a complaint filed with the US District Court for the District of Massachusetts prosecutors also alleged Inform Diagnostics had instructed its histotechnicians to determine which tests to perform and submit for billing prior to any analysis by a pathologist.
The allegations contained in the DOJ settlement result from a whistleblower lawsuit brought against Inform Diagnostics in 2019 pursuant to provisions of the federal False Claims Act. The whistleblower will receive 17 percent of the money recovered, about $2.7 million, and Inform also agreed to pay the whistleblower another $62,000 for attorney's fees and other costs.