Texas-based Access DX Laboratory, its former CEO Michael Stewart, and Florida Businessman Harold Shatz entered into settlements totaling $36.4 million with the United States to resolve allegations that they violated the False Claims Act (FCA) when they paid kickbacks and billed Medicare and Medicaid for medically unnecessary genetic testing. As part of Baron & Budd’s work in FCA whistleblower suits, the firm keeps a close eye on notable settlements, whether reached by the firm or otherwise. Though the following case was not brought forward by Baron & Budd, it marks a notable settlement in the realm of health care fraud.

Behind the case

According to the suit, the United States held that, from 2018 through 2020, the defendants committed a number of offenses, including paying kickbacks to marketers in return for referrals of patients for genetic testing, did not bundle billing codes for genetic testing, paid out telemedicine providers for false and fraudulent doctors’ orders, as well as submitted and caused the submission of false claims for genetic testing. In the end, Stewart pled guilty to conspiracy to defraud the US and to pay and receive healthcare kickbacks. Businessman Shatz similarly pled guilty to conspiracy to defraud the United States and receiving healthcare kickbacks.

These settlements were made possible with the help of a whistleblower, who filed a claim under the qui tam whistleblower provisions of the False Claims Act. The whistleblower was president of a Massachusetts marketing company hired to market genetic testing to Medicare and Medicaid beneficiaries. Subject to the whistleblower provisions, the whistleblower filed an action on behalf of the United States, allowing them to receive a portion of any recovery. In this instance, the whistleblower received a $7.2 million share of the total settlement amount.

The Role of Whistleblowers

Health care fraud remains the most common type of FCA fraud. Earlier this year, the Administration intensified its efforts to combat fraud, launching the Task Force to Eliminate Fraud and the National Fraud Enforcement Division. This enforcement was one of many results of that initiative. Such enforcements are critical in ensuring taxpayers are not cheated, health care recipients are not harmed, and American businesses that play by the rules see the benefits from doing so.

As in this case, whistleblowers are a critical part of uncovering such fraud. Whistleblowers can be anyone, from an insider at a company committing fraud, to a vendor or marketer enticed by an offending party to participate in fraud. Whistleblower suits whose information leads to a successful enforcement may receive 15 to 30 of the recovered amount.

About Us

Baron & Budd’s whistleblower representation team has more than 50 years of experience representing dozens of clients in government fraud cases. They have returned more than $6 billion to federal and state agencies with whistleblower recovery shares as high as 50%.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.