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Physicians

Multi-Million Dollar Settlements in Healthcare Kickback Scheme Allegations

Strategic Insights

— 1 min read

The United States Department of Justice has secured $59 million in civil settlements in a healthcare kickback scheme involving 50 physicians, led by former laboratory CEO Christopher Grottenthaler, who agreed to pay $4.25 million to resolve allegations of making illegal payments to doctors for laboratory referrals. Additionally, two physicians, Hong Davis and Elizabeth Seymour, and seven marketers agreed to pay a total of $1.83 million to settle the allegations. The settlements also resolve allegations of kickbacks disguised as MSO investment distributions, consulting fees, and processing and handling fees to induce laboratory testing referrals.

Key Takeaways:

  • The settlements involve allegations of illegal kickbacks to 50 physicians, totaling $59 million in civil settlements.
  • Christopher Grottenthaler, former CEO of True Health Diagnostics, agreed to pay $4.25 million to resolve allegations of making illegal payments to doctors for laboratory referrals from January 2015 to May 2018.
  • Two physicians, Hong Davis and Elizabeth Seymour, agreed to pay a total of $358,842 to settle allegations of taking kickbacks in violation of the Anti-Kickback Statute.
  • Seven marketers agreed to pay a total of $1.459 million in settlements with the United States.
  • The settlements also resolve allegations of kickbacks disguised as MSO investment distributions, consulting fees, and processing and handling fees to induce laboratory testing referrals.
  • The cases were brought by the Department of Justice's Civil Division and the U.S. Attorney's Office for the Eastern District of Texas, with assistance from HHS-OIG and DCIS.
  • The settlements are part of the government's effort to combat healthcare fraud and protect taxpayer money.
  • Tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 1-800-HHS-TIPS.

Sources:

  • United States Attorneys General
  • One-time laboratory CEO Christopher Grottenthaler
  • Two physicians -- Hong Davis, M.D., and Elizabeth Seymour, M.D.
  • Seven marketers -- Courtney Love, Stephen Kash, Laura Howard, Jeffrey Parnell, Stanley Jones, Jordan Perkins, and Ruben Marioni
  • Department of Justice's Civil Division
  • U.S. Attorney's Office for the Eastern District of Texas
  • HHS-OIG
  • DCIS
  • Department of Health and Human Services

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