But, both the exception and safe harbor prohibited the non-physician entity from covering costs in exchange for referrals. These rules constituted an exception to the Stark Law and a safe harbor under the AKS. Rules promulgated by the United States Department of Health and Human Services (“HHS”) allowed non-physician healthcare providers to pay up to 85% of the cost for physicians to transition to EHR. That effort began in 2006 and had an anticipated completion date in 2014. The whistleblower complaints claimed that Inform took advantage of a government effort to get physicians to switch from paper records to EHR.
#INFORM DIAGNOSTICS FREE#
In exchange for remuneration and free services, the physicians agreed to refer patients to Inform for their laboratory needs.
#INFORM DIAGNOSTICS HOW TO#
Inform’s free consultations were aimed at educating physicians on how to use the new EHR systems to maximize their incentive payments and avoid losses through penalties. The various suits resolved in this settlement focused on Inform’s alleged efforts from 2012 onward to induce physicians-via (1) direct remuneration and (2) free consulting services-to invest in the company’s EHR technology. In its press release DOJ announced that the whistleblowers’ share of the settlement “had not yet been determined.” AKS Violations All three cases were brought in the Middle District of Tennessee. The first was brought to light by former Miraca Life Science Senior Vice President of Commercial Operations Paul Dorsa in September 2013 the second was brought by a company called LPF LLC in June 2016 and the third was brought in December 2016 by former Miraca Life Sciences dermatopathologists Michael Heaphy and Brian Hall. The False Claim Act generally permits only the first relator to file a case on a particular fraudulent scheme to proceed. However, different relators often bring different factual information to bear or present legally distinct claims based on different fraudulent schemes. In such a situation, later-filed cases may not be barred by the FCA’s first-to-file rule. The settlement resolves three separate cases brought by different whistleblowers. The settlement amount will be paid by the former parent company of Inform, Japan-based Miraca Holdings Inc.
Texas-based pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., agreed on January 30th to a $63.5 million settlement to resolve allegations it violated the False Claims Act (“FCA”), the Anti-Kickback Statute (“AKS”), and the Stark Law by providing subsidies to referring physicians for electronic health record (“EHR”) technology as well as free or discounted consulting services.
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