FILE - A health worker tests passengers for the COVID-19.
A Dallas-based clinical laboratory and its investors will pay $24 million to resolve allegations that performed unnecessary tests on seniors who received COVID-19 tests.
Magnolia Diagnostics, and its owners, John Bains and Kelly Bains, will pay $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for unnecessary respiratory tests performed on seniors who were getting COVID-19 tests.
Investors in the laboratory agreed to pay $4.8 million to resolve common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act.
What they're saying:
"We will pursue not only companies that submit false claims and the owners who direct the misconduct, but also investors who receive and retain its financial benefits — especially when vulnerable Americans are exploited for profit," Assistant Attorney General Brett Shumate said.
The backstory:
The federal government accused John Bains and Kelly Bains of developing a scheme to require respiratory pathogen panels while performing community testing for COVID-19 in senior living communities.
Investigators said Magnolia used prepopulated forms to obtain provider signatures to perform the tests. Later, they said Magnolia continued to perform the tests without orders and after providers and communities requested COVID-19-only testing, while questioning the RPP's necessity or clinical value.
Investigators claimed John Bains threatened to end COVID-19 testing at communities that refused RPPs and allegedly altered provider-signed requisition forms to expand the scope of the provider's authorization.
Federal investigators also claimed that Magnolia froze and stored thousands of respiratory specimens, sometimes for weeks or months, before thawing them and testing them at a time when they could no longer be used to inform timely treatment, isolation or infection-control decisions. Between April 1, 2020, and Sept. 30, 2021, investigators said Magnolia submitted false claims to Medicare for thousands of unnecessary RPPs.
The Source: Information in this article comes from the U.S. Dept. of Justice.