NC Whistleblower Exposes Asheville Lab

Fraud can happen close to home, as we saw when Genova Diagnostics, Inc. of Asheville, NC, was hit with a whistleblower claim.  If you have information about someone defrauding the government, don’t hesitate to call an experienced whistleblower attorney to help you evaluate your next steps.

Questionable diagnostics lead to qui tam claim

Whenever a whistleblower claim is filed, it’s important to remember that the whistleblower – called the “relator” – is actually suing on behalf of the government. This is because the False Claims Act allows private citizens to seek justice on behalf of the government. When the victim is not the government, it is not a qui tam claim, but a private, civil suit.

In this case, Genova Diagnostics, Inc., based in Asheville, NC, had a whistleblower file a claim because the company was allegedly submitting claims for unnecessary diagnostic procedures to Medicaid, Medicare, TRICARE, and the federal employee health program. All these programs are government-run and taxpayer-funded, which triggers the False Claims Act.³

Unnecessary and questionable tests, referrals cost taxpayers money

According to the claim, Genova ordered tests that were not medically necessary: the NutrEval test, the GI Effects Lab Test, and the IgG Allergen test. The NutrEval test promises to reveal nutritional deficiencies and imbalances. The GI Effects Lab Test was promoted as a tool to investigate intestinal function and the presence of infection. Both the NurtEval and GI Effects tests are stool tests, and products of Genova Diagnostics.

The IgG Allergen test is a blood test that was marketed as identifying food allergies. However, its usefulness has been called into question by the American Academy of Asthma Allergy and Immunology (AAAAI). The Canadian Society of Allergy and Clinical Immunology (CSACI) even called the test “unvalidated.”

Pushing two seemingly proprietary tests and one of questionable use certainly is a red flag, though not necessarily fraud if the tests are medically necessary. In this case, they apparently were not.

The lawsuit also alleged that the company used improper billing techniques, and referred patients to a trio of phlebotomy, or blood-drawing, vendors. Genova also had improper financial ties to these companies according to the Stark Law.

What is the Stark Law?
While the Stark Law has three separate provisions, it is commonly invoked when physicians or providers give referrals to facilities or businesses in which they hold a financial interest, which can create a conflict of interest regarding what’s best for the patient.

Company settles, whistleblower earns reward

Genova, for its part, denied wrongdoing and claimed that an internal investigation confirmed that the tests were medically necessary. However, the company chose to settle the suit. It will pay the Department of Justice $17 million, and will be subject to independent review over the next five years. If certain financial contingencies are not met, the company could owe an additional $26 million.

The whistleblower in the case, former vice president and Chief Medical Officer at Genova, recovered approximately $6 million.¹ Whistleblower awards vary from case to case and depend on the case being successful, the amount and quality of information provided to make the case, and whether or not the government decides to pursue the case itself or observe as an interested third party.

If you have inside knowledge of fraud, act fast and call an experienced whistleblower attorney

There are a number of reasons to act quickly. The first whistleblower is in the best position to receive a possible award, so being the first to file is important. Second, the longer you wait, the more fraud that may take place. Third, if the Department of Justice initiates a case before you file, you have no claim to an award.

Many whistleblowers hesitate because they fear retaliation, such as losing their jobs and livelihoods. We understand. Whistleblower cases are filed under seal to protect the case and the relator. Contact our experienced whistleblower attorneys online for a free, discreet, confidential case evaluation, or call 1-888-292-8852.

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