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Tacoma drug-testing lab part of multi-million-dollar kickback scheme, feds say

July 20, 2020 12:09 PM,

A drug-testing lab in Tacoma is named in a civil suit brought by the Department of Justice against the lab’s parent company, which is accused of illegally paying for referrals.

According to a press release, the DOJ settled the civil lawsuit July 20 with Cordant Health Solutions, which will pay nearly $12 million to government health care programs. Cordant operates drug-testing labs and had allegedly been generating business for urine-testing services by paying companies to get referrals for individuals insured through government programs. That is illegal under the Anti-Kickback Statute and the False Claims Act.

“The questionable business practices and unnecessary medical testing revealed in this matter only served to improve financial gain and not the patients’ well-being,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office, in the press release.

The two companies named in the press release are Northwest Physicians Laboratories, LLC and Genesis Marketing Group. They both allegedly received payments from 2013 to 2015 in exchange for referring urine tests to Cordant labs.

The lab locations involved in the suit are Sterling Reference Laboratory in Tacoma and Forensic Laboratories in Denver, according to the press release.

“The government alleged that the Cordant organization paid millions of dollars to buy referrals at the expense of the nation’s taxpayers,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services in the press release.

The press release said Cordant does not admit any wrongdoing under the settlement. As part of the settlement, Cordant entered into a Corporate Integrity Agreement with the Office of the Inspector General.

According to the press release, the agreement is meant to advance “compliance with the statutes, regulations, program requirements and written directives of Medicare and all other federal health care programs.” Under the agreement, Cordant must report to the Office of the Inspector General and keep an Independent Review Organization to track its agreements.

According to the press release, Northwest Physicians Laboratories, one of the companies Cordant paid, and three of its executives were indicted on charges in December 2019, alleging they solicited kickbacks in their dealings with a number of urine testing labs, including Cordant. The trial in that criminal case is set for Feb. 1, 2021.

The $11,942,913 Cordant settlement is the largest so far related to the Northwest Physicians Laboratories kickback scheme.