NEW YORK – Molecular diagnostics firm Agendia has settled with the US government for $8.25 million over allegations of Medicare fraud, the US Department of Justice, Western District of Kentucky announced on Wednesday.
The DOJ alleged that the company, which has offices in the Netherlands and Irvine, California, conspired with hospitals to "artificially delay" ordering the firm's MammaPrint genetic test for breast cancer in order to circumvent Medicare's 14-day rule, which determines who can bill Medicare for certain lab services.
The rule prohibits labs from separately billing Medicare for tests conducted on certain specimens if a physician ordered the test within 14 days of the patient being discharged from a hospital. If the test was performed after the 14-day period, laboratories can charge Medicare directly for the test.
According to the DOJ, Agendia "engaged in a nationwide scheme to circumvent" the 14-day rule in order to bill Medicare directly for MammaPrint tests that were ordered within 14 days of a patient being discharged from a hospital. The company did so by refusing to perform the tests if a Medicare patient had been discharged less than 14 days earlier. It would cancel the order and then ask the physician to resubmit it after 14 days had elapsed.
Alternately, Agendia would automatically hold orders for a Medicare patient and refuse to perform the test until the 14-day period passed. After it did, the company would contact the ordering physician to confirm the order and use the date of confirmation for purposes of billing Medicare instead of the actual date the test was ordered, the DOJ alleged.
The settlement stems from a whistleblower lawsuit that was filed by a former employee of Mercy Health-Lourdes Hospital in Paducah, Kentucky under the False Claims Act. The US intervened in the lawsuit for purposes of the settlement this past May, the DOJ said, adding it reached a separate settlement with the hospital.
The DOJ alleged the hospital conspired with Agendia to circumvent the date of service rules by holding tissue specimens for at least 14 days after a patient was discharged before sending it to Agendia to be tested. This allowed the company to separately bill Medicare for the test.
The hospital paid the US about $211,000 to settle those false claims allegations in 2017.