Texas Physician, Office Manager Settle Federal Kickback Claims

A Texas couple is paying nearly a half-million dollars to settle federal kickback allegations.

Vijesh Patel, M.D., and his office manager/wife Laju Patel, both of Port Neches, Texas, have agreed to pay $422,789 to resolve False Claims Act allegations of receiving illegal kickbacks for referring patients for laboratory testing. The couple has agreed to cooperate with the Department of Justice’s investigations of, and litigation against, other participants in the alleged schemes.
 
“Kickbacks can undermine a physician’s medical judgment, result in unnecessary testing, and increase healthcare costs borne by taxpayers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue physicians, laboratories, and others responsible for schemes that violate rules intended to safeguard the integrity of federal healthcare programs.”
 
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving money to induce referrals of items or services covered by Medicare, Medicaid and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

“Patients deserve to know that the decisions their healthcare providers are making are based solely on their medical needs, not on some profit-making scheme,” said U.S Attorney Philip R. Sellinger for the District of New Jersey. “Our office will continue to pursue anyone responsible for actions that have the potential to corrupt the medical decision-making process.”
 
The settlement announced this week resolves allegations that the Patels received kickbacks in return for Dr. Patel’s referrals to three laboratories:

• Texas: From December 2016 to July 2018, Dr. Patel allegedly received thousands of dollars in payments from a purported management service organization (MSO) named Indus MG LLC in return for ordering laboratory tests from True Health Diagnostics LLC (True Health), a clinical laboratory in Frisco, Texas. The Indus MSO’s payments to Dr. Patel allegedly were disguised as investment returns but in fact were based on, and offered in exchange for, his referrals to True Health.
• New Jersey: From August 2018 to August 2021, Dr. Patel allegedly received thousands of dollars in kickbacks disguised as investment returns from a purported MSO named Avior Group LLC (Avior) in return for ordering laboratory tests from RDx Bioscience Inc. (RDx), a clinical laboratory in Kenilworth, N.J. RDx allegedly funded remuneration to Dr. Patel in volume-based commissions paid to an independent contractor recruiter, Corum Group LLC, which used an associated company, Avior, to pay kickbacks to Dr. Patel and other physicians in return for their referrals. In addition, fom December 2018 to August 2022, Mrs. Patel allegedly received kickbacks from RDx in commercially unreasonable fees to purportedly collect urine specimens for testing that Dr. Patel referred to RDx.
• South Carolina: From August 2019 to December 2021, Dr. Patel allegedly received hundreds of dollars per month in inflated space rental payments in return for ordering laboratory tests from Labtech Diagnostics LLC (Labtech), a clinical laboratory in Anderson, S.C. Labtech’s rental payments allegedly were for a commercially unreasonable amount of space and excessive days and time. 

“This settlement demonstrates the Eastern District of Texas’s firm and continued commitment to pursuing all persons responsible for engaging in kickback schemes that inevitably harm the taxpayers, increase costs to care, and decrease access to healthcare,” said U.S Attorney Brit Featherston for the Eastern District of Texas. “We remain vigilant in our pursuit to put a stop to those who partake in kickback schemes of this kind and to hold them accountable for the collective harm they caused.”

The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorneys’ Offices for the Eastern District of Texas, District of New Jersey, and District of South Carolina, with assistance from HHS-OIG and DCIS. To date, the United States has recovered more than $32 million relating to conduct involving True Health or MSO kickbacks to physicians in Texas, including False Claims Act settlements with 34 physicians, two healthcare executives, one office manager, and one laboratory. In addition, the United States has filed a lawsuit under the False Claims Act against former True Health CEO Christopher Grottenthaler and others (United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 E.D. Tex.).  A defendant who violates the act is liable for three times the amount of the government’s losses plus applicable penalties.
 
“Patients should be able to trust that their doctor’s medical recommendation is in their best interest and not influenced by the doctor’s financial gain,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina. “Our office has and will continue to hold accountable those that give and receive illegal kickbacks, both to maintain the public’s trust in the healthcare system and to ensure taxpayer money is properly spent.”

The settlement was handled by Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section), Assistant U.S. Attorney Kruti Dharia for the District of New Jersey, Assistant U.S. Attorneys James Gillingham, Adrian Garcia and Betty Young for the Eastern District of Texas, and Assistant U.S. Attorney Beth C. Warren for the District of South Carolina.
 
“Healthcare providers engaging in kickback schemes corrupt the provider-patient relationship and impose hidden costs on the healthcare system,” said Assistant Special Agent in Charge Susan A. Frisco with the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Alongside our law enforcement partners, our agency is committed to safeguarding the integrity of federal health care programs by holding individuals who unlawfully bill the programs accountable for their actions.”
 
“Today’s outcome demonstrates the steadfast determination of the Department of Defense (DoD) Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our investigative partners to root out fraud perpetrated against TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling for the DCIS Southwest Field Office. “DCIS remains focused on protecting and preserving valuable taxpayer dollars by holding those accountable who attempt to defraud the DoD.”
 
The claims resolved by the settlement are allegations only, and there has been no determination of liability.