American International Biotechnology to Settle False Claims Act Allegations for Nearly $350,000

In an interesting False Claims Act case involving government contracts concerning biotechnology, Virginia-based American International Biotechnology reportedly defrauded the federal government by improperly billing for genetic testing. The case involves the widespread problem of fraud against Medicare and Medicaid, and reveals the true extent to which healthcare fraud is invading the federal healthcare programs.

The Case Against American International Biotechnology

American International Biotechnology is in the business of providing several services, including DNA testing, research support services for the life sciences, and clinical laboratory testing. According to the whistleblower lawsuit, which was filed under the False Claims Act by a former employee familiar with the company’s policies, American International Biotechnology had developed a fraudulent kickback scheme with several medical providers in the Pittsburgh area. More specifically, employees of the company are alleged to have offered a kickback of up to $50 per patient for referrals made for genetic testing. Many of these kickbacks were offered directly to nurses by contract sales agents.

According to the complaint, these sales agents would gain confidential information about patients’ healthcare information and data while visiting facilities under the guise of checking on and maintaining cardiac equipment.

After allegedly gaining information about the volume of Medicare and Medicaid patients seeking care at various medical facilities, sales agents met with doctors and physicians to encourage them to offer genetic testing. When one doctor allegedly initially declined to do so, the sales agent assured him it was for a research project and the testing was free – and the doctor thereafter obliged. The doctor received $50 per patient who consented to the genetic testing, and was instructed to offer the service to anyone who walked in the door. Thereafter, the company sought reimbursement for the genetic tests from Medicare and Medicaid – and received an average of $4,000 per reimbursement for these tests, which were completely medically unnecessary.

The relator claims to have initiated several letters and complaints internally against the practices, all of which were ignored or dismissed.

The scam was ultimately uncovered by several patients who noticed the significant charges on their Explanation of Benefits notice. Upon reporting the information to their doctor, several physicians asserted that American International Biotechnology promised them that the services were free and would not be charged to insurance.

According to the defendant, “[AIB] had no knowledge of the alleged actions of the contract sales agent, and only learned of the action on receipt of the complaint; it did not approve or sanctions the actions of the sales agent.”

Aware of Similar Healthcare Fraud? Contact Berger Montague Today

If you are aware of a similar scam or believe your employer may be involved in unlawful kickback activity involving Medicare and Medicaid patients, we encourage you to contact us right away to discuss your options under the False Claims Act. Currently, healthcare fraud is the number one issue litigated under the FCA, and with your help we can bring even more scams to light. For more information, contact us today.