Settlement Sensation: NJ Lab and CEO Resolve Healthcare Fraud Allegations with $13M Agreement
In a landmark resolution to a healthcare fraud case, RDx Bioscience Inc., a clinical laboratory based in Kenilworth, New Jersey, and its CEO, Eric Leykin, have settled for $13.25 million. The agreement, announced by U.S. Attorney Philip R. Sellinger, stems from allegations of illegal kickbacks and unnecessary medical testing, emphasizing the government’s unwavering commitment to combating healthcare fraud.
The comprehensive settlement encompasses a payment of $10.32 million to the federal government and an additional $2.93 million to the state of New Jersey. The resolution targets claims made under the False Claims Act, alleging that RDx’s financial practices influenced healthcare providers’ decisions, resulting in unnecessary medical testing at the expense of taxpayer dollars.
“Kickbacks have no place in our healthcare system. Patients need to trust that healthcare referrals are made in their best interests, not in the interests of lining someone else’s pockets. We have pursued and will continue to pursue laboratories that enter into unlawful financial arrangements that waste taxpayer dollars and improperly influence healthcare providers,” stated U.S. Attorney Sellinger.
The allegations, from 2017 to 2023, involve various illicit kickback methods designed to boost referrals for RDx’s laboratory tests. These methods ranged from paying commissions and disguised consulting fees to providing specimen collection fees as inducements.
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Naomi Gruchacz, Special Agent in Charge of the HHS Office of Inspector General, highlighted the deceptive nature of these payments, emphasizing that they violated the Anti-Kickback Statute, which aims to protect medical decision-making from improper financial influences.
In addition to the kickback allegations, RDx and Leykin were accused of submitting or causing false claims for non-essential or duplicate laboratory tests. Such practices not only breached federal healthcare program regulations but also raised concerns about the necessity and efficiency of the conducted tests.
These settlements, resulting from a collaborative effort between the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, Fraud Section, underscore the government’s steadfast focus on combatting healthcare fraud. The legal representation in these matters was provided by Assistant U.S. Attorney Kruti Dharia and Senior Trial Counsel Christopher Terranova.
While the settlements mark the resolution of the allegations, it is crucial to note that there has been no determination of liability. This case serves as a poignant reminder of the government’s vigilance in addressing healthcare fraud, encouraging the public to report any suspicions of fraud or abuse to the Department of Health and Human Services.
“Regardless of how they are disguised, kickbacks for laboratory referrals are illegal and can corrupt medical providers’ decision-making and subject patients to expensive and unnecessary testing,” emphasized Principal Deputy Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division. The settlements highlight the government’s commitment to upholding the integrity of the healthcare system and ensuring that patient welfare remains a top priority.
