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July 01, 2020 | Healthcare Fraud

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.

Qui Tam Claims

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.


About the Author

Gary Jackson is a highly-accomplished whistleblower, personal injury, consumer protection, and class actions attorney in North Carolina. He is a member of Taxpayers Against Fraud and is frequently asked to speak at education programs for lawyers throughout the country. Gary’s peers selected him for the “Best Lawyers in America” list in Litigation by Best Lawyers in America from 2020-2022.* North Carolina Super Lawyers has designated Gary to their “Super Lawyers” list every year from 2006-2021 for Class Actions and Mass Torts.* From 2013-2015, the same publication named him a “Top 100 Lawyer in North Carolina.”** *Attorney’s firm is the Law Offices of James Scott Farrin. For standards of inclusion, visit **Attorney’s firm is the Law Offices of James Scott Farrin. For standards of inclusion, visit

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Contact the Carolina
Whistleblower Attorneys

If you’re wondering if it’s a good idea to speak with a whistleblower lawyer about what you know, let us set the record straight.

  • Corporate ethics hotlines can be risky and may lead to termination. If you’ve already done this, call us immediately.
  • Your coworkers could be aware of the fraud – or complicit in it – and you should not talk to them about it.
  • The first claim to be filed under the False Claims Act can proceed – if you’re not first, you’re at a serious disadvantage and may get nothing (another reason not to speak to your coworkers about it).
  • A confidential discussion costs you a few minutes, but could save you time, stress, and money.


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