NeoGenomics Laboratories to Pay $9.8 Million to Resolve FCA Allegations Relating to Below-Fair-Market-Value Consulting Services

NeoGenomics Laboratories to Pay $9.8 Million to Resolve FCA Allegations Relating to Below-Fair-Market-Value Consulting Services

Florida-based laboratory NeoGenomics Laboratories Inc. has agreed to pay $9,813,260 to resolve allegations that it violated the False Claims Act (FCA). The allegations centered on the company’s provision of below-fair-market-value consulting services to health care providers that referred beneficiaries to NeoGenomics for laboratory testing. Additionally, the company was accused of paying variable referral-based compensation to independent consultants to secure new referring providers.

According to the government, NeoGenomics operated a Laboratory Clinical Initiative program where it provided consulting services to 28 health care providers seeking to establish in-house flow cytometry and Fluorescence In-Situ Hybridization capabilities. The US Department of Justice (DOJ) maintained that NeoGenomics’ program induced referrals for clinical laboratory tests in violation of the Anti-Kickback Statute (AKS) and that the financial arrangements created by these practices, along with the associated submission of claims, constituted violations of the Stark Law. NeoGenomics also allegedly contracted with independent consultants under terms that tied their compensation, at least in part, to the volume or value of referrals generated by the customers those consultants brought in. 

As part of the resolution, the DOJ recognized NeoGenomics’ steps to cooperate during the investigation, along with its voluntary disclosures of its conduct to the DOJ. These efforts, along with remedial actions such as ending the consulting arrangements and terminating the employees involved, resulted in cooperation credit for NeoGenomics. 

Read the DOJ’s press release here.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

DEXYCU Manufacturer to Pay More Than $4.7 Million to Resolve FCA Allegations

On July 17, the DOJ announced that it reached a settlement with EyePoint, Inc. (formerly EyePoint Pharmaceuticals, Inc.), of Watertown, Massachusetts, to resolve AKS and FCA allegations tied to sales of its drug, DEXYCU. The DOJ alleges that EyePoint paid kickbacks to ambulatory surgery centers (ASCs) to induce the ASCs to purchase DEXYCU, which led to false claims for reimbursement from the federal government. 

The DOJ’s allegations focused on two overarching schemes that took place between January 2019 and March 2023. First, in response to commercial insurance denying coverage of DEXYCU, EyePoint allegedly covered ASCs’ costs through its “Assurance Program” by either offering to pay ASCs cash or by providing replacement product at no cost. Second, EyePoint effectively provided DEXYCU at no cost to patients whose commercial health insurance did not cover the drug by offering thousands of free samples to ASCs to use on patients who would otherwise pay out of pocket. As a result, the DOJ asserts that these free samples led ASCs to purchase more units of DEXYCU to be reimbursed by Medicare, Medicaid, and TRICARE and eliminate financial losses incurred by commercial insurers denying coverage. 

In connection with the settlement, EyePoint agreed to pay over $4.6 million and entered into a five-year Corporate Integrity Agreement with the US Department of Health and Human Services Office of Inspector General. EyePoint will pay an additional $25,478 to certain participating states. 

The case is captioned United States, et al. ex rel. AFCE, LLC v. EyePoint Pharmaceuticals, Inc., No. 21-cv-120171. 

Read the DOJ’s press release here. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.

30th Street Station Contractor and Owner Agree to $7.2 Million Resolution Arising From Kickbacks Paid to Amtrak Official

Mark 1 Restoration Company and its owner Mark Snedden have agreed to pay $7,257,232.12 to resolve civil claims related to allegations that Mark 1 paid kickbacks to an Amtrak official in connection with a contract to renovate Philadelphia’s 30th Street Station. The settlement requires Mark 1 and Snedden to pay $2,400,000 and to release Amtrak from any claim to $4,857,232.12 in additional funds that Amtrak retained or otherwise did not pay to Mark 1 after learning of the scheme. 

Pleadings from the related criminal proceedings provide detail about the alleged arrangement: Snedden and fellow Mark 1 executives conspired to furnish gifts and other items of value — including paid vacations, jewelry, cash, dinners, entertainment, a dog, and training for that dog — to the Amtrak employee responsible for overseeing the renovation project. The benefits conferred on the official totaled approximately $323,686. In return, the Amtrak employee allegedly leveraged his oversight role to secure contract modifications that artificially inflated project costs, ultimately resulting in more than $2 million in overbilling to Amtrak. 

Snedden has already pleaded guilty to criminal charges related to the kickback scheme, as have Mark 1 executives Donald Seefeldt, Lee Maniatis, and Khaled Dallo.

Read the DOJ’s press release here.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Louisiana Company Agrees to Pay Nearly $3 Million to Resolve Allegations of PPP Fraud 

CAN USA, Inc., a Harvey, Louisiana–based inspection, repair, and maintenance services firm with offices in Hackensack, New Jersey, has agreed to pay $2,916,900 to resolve FCA allegations that it improperly obtained and received forgiveness of a Paycheck Protection Program (PPP) loan under the CARES Act. The DOJ contends that in January 2021, CAN USA applied for and received a $2 million Second Draw PPP loan despite exceeding the program’s 300-employee eligibility threshold when its foreign affiliates’ workforces were included, as the PPP rules required. In its loan application, CAN USA certified that it employed no more than 300 people; however, the United States alleges that CAN USA’s combined domestic and international headcount surpassed that limit. After obtaining the loan, CAN USA sought and received full forgiveness of the $2 million principal plus accrued interest, effectively extinguishing its repayment obligation on funds to which it was not entitled.

The case is captioned United States ex rel. Clearwater Metrics LLC v. CAN USA Inc., Civil Action No. 26-3469 (D.N.J.).

Read the DOJ’s press release here.

The claims resolved by the settlement are allegations only and there has been no determination of liability.