False Claims Act Case Settles for $256 Million

In some regions around the country, a kickback consists of a group of friends winding down and “kicking back” at a casual gathering. However, in the professional and legal arena, a kickback is a form of bribery. The False Claims Act (“FCA”) prevents kickbacks in the healthcare industry under the Anti-Kickback Statute, which forbids healthcare facilities from, inter alia, bribing doctors to refer Medicare patients to them. Those practices are illegal because they are prompting the government to spend public funds superfluously solely for the companies’ own profit. Furthermore, the qui tam provisions in the FCA provide certain protections and incentives to whistleblowers who file FCA lawsuits against companies and individuals that defraud the government.

As a result, many kickback schemes have been exposed and brought to trial over the past few years. One example, United States ex rel. McGuire v. Millennium Laboratories, Inc., No. 12-cv-10132 (D. Mass.) exemplifies such FCA violations. In that case, it was alleged that Millennium Laboratories, Inc. (“Millennium” or the “Company”) systematically cheated federal healthcare programs by billing for excessive and unnecessary urine drug tests and related genetic testing. Millennium also allegedly provided free point-of-care urine drug testing cups to physicians in exchange for an agreement to send those urine specimens back to the Company for further and expensive testing. According to the Department of Justice, Millennium’s practices contributed to unnecessary costs being imposed on federal healthcare programs, such as Medicare and Medicaid. Consequently, eight lawsuits were brought by whistleblowers under the FCA.

After nearly four years since investigations started, Millennium has settled with the federal government for $256 million to resolve several lawsuits that alleged it scammed governmental funded programs. The settlement includes payment of $227 million to be paid to resolve the FCA allegations that Millennium systematically billed federal health care programs for excessive and unnecessary drug testing and provided kickbacks to physicians to induce business, $10 million to resolve false claims allegations for medically unnecessary genetic testing that was performed on a routine basis, and $19 million to the Centers for Medicare and Medicaid Services to resolve administrative actions regarding Millennium’s claims to Medicare for certain drug test billing codes. $31.83 million of the settlement will be given to the whistleblowers, which is included in the breakdown. Additionally, the Company entered into an integrity agreement with the Department of Health and Human Services’ Office of Inspector General that requires Millennium to be monitored for five years.

The legal team at SFMS has significant experience litigating FCA matters. James E. Miller and Laurie Rubinow, along with a team of other SFMS lawyers and professionals, are currently litigating one of the most prominent kickback cases in the United States (Bilotta v. Novartis Pharmaceuticals Corp., Civil Action No. 11-CIV-00071 (S.D.N.Y.), along with representatives of the Department of Justice and the New York Attorney General’s Office. The Bilotta case relates to, among other things, the alleged payment of bribes by Novartis to physicians speaking on behalf of Novartis with respect to certain cardiovascular (“CV”) drugs. If you have any questions regarding this subject or this posting, please contact Chiharu Sekino (csekino@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains affiliate office in London, England and is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.


Batchelor, Jacob. “Lab Co. To Pay $256M To Settle FCA, Kickback Charges.” Law360. Last modified October 19, 2015.

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