CHARLOTTE, NC – William T. Stetzer, Acting United States Attorney for the Western District of North Carolina, today announced that the United States has settled claims against Philip McHugh, one of the former owners of Physicians Choice Laboratory Services (PCLS), a former diagnostic testing laboratory located in Charlotte and Rock Hill, South Carolina. McHugh agreed to pay $ 2,021,795.57 to resolve US allegations that he violated the Anti-Kickback Statute (AKS) and, as a result, caused PCLS to submit millions of dollars in bogus claims. reimbursement to the Medicare program in violation of the federal False Claims Act (FCA).

In June 2019, the United States filed its intervention complaint alleging FCA claims against McHugh, PCLS, and other laboratory agents based on allegations that it participated in various programs to offer or to provide benefits to physicians in exchange for sending patient samples. for drug testing. The United States argued that such conduct violates the AKS, which specifically prohibits any person or entity from knowingly and willfully offering, paying, soliciting or receiving remuneration for influencing the return of items or goods. services reimbursable by a federal health care program, and that as a result, she was entitled to recover damages under the LAF.

“Strategic drug testing, when medically indicated and ordered without monetary gain, is an important tool that healthcare professionals can use to protect patients by confirming prescription drug compliance and identifying signs substance use disorders, “said Acting US Attorney Stetzer.” Offering financial incentives to health care providers in return for performing these tests not only violates the law, but undermines important efforts by medical and law enforcement communities to fight America’s opioid crisis. ”

“This lab used prohibited financial instruments and physician gifts for patient referrals,” said Derrick L. Jackson, special agent in charge of the US Department of Health and Human Services, Office of the Inspector General at Atlanta (HHS-OIG). “Phone misunderstanding arrangements are bribes that stifle competition and direct business to the firm offering the incentives.

These regulations resolve allegations by the United States that, during the period beginning June 20, 2013 and continuing through October 26, 2015, PCLS submitted false statements to the Medicare program due to McHugh’s participation in various health care programs. bribes, including (1) providing urine drug testing equipment, including desktop analyzers and related supplies and services, to two physicians; (2) the payment by PCLS of volume-based commissions, and later a salary, to an individual in exchange for that individual’s exercise of influence over two medical practices; and (3) the provision of loans to two physicians – all to encourage referral of quantitative urine drug tests to the PCLS.

In December 2019, the United States Attorney’s Office for the Western District of North Carolina announced that another defendant, Manoj Kumar, a former sales representative and director of PCLS, had paid $ 649,407 to resolve the allegations of the United States that he participated in schemes to illegally induce doctors to refer patients to the PCLS for medically unnecessary urine drug tests.

The United States civil action was filed in the District of North Carolina following the filing of two whistleblower complaints under the qui tam provisions of the CFL, entitled United States ex rel. Jenkins et al. v. Physician’s Choice Laboratory Services et al., originally deposited in the Eastern District of Tennessee, and United States ex rel. Hartnett & Shoched v. Physicians Laboratory Services, LLC et al., originally filed in the Middle District of Florida), which were transferred to the Western District of North Carolina and consolidated under civil case number 17-cv-37.

This settlement was the result of coordinated efforts and an investigation by the HHS-OIG and the US Attorney’s Office. Claims resolved in this settlement are allegations only and there has been no determination of liability.