San Diego-based medical technology company Phamatech and its CEO have agreed to pay more than $3 million to resolve allegations that they submitted false claims to Medicare and received government reimbursements for unnecessary lab testing, the U.S. Attorney's Office said Friday.
Prosecutors allege the company paid kickbacks to a medical clinic, which in return ordered Phamatech lab testing for its patients enrolled in Medicare.
Over the course of about two years, Phamatech, which manufactures diagnostic devices and provides lab testing services such as drug and alcohol tests, paid a per-specimen fee to Imperial Valley Wellness in exchange for referrals of urine samples from Medicare beneficiaries, according to the U.S. Attorney's Office.
Many of the samples referred to Phamatech were not necessary and thus ineligible for Medicare reimbursement, prosecutors said.
The company, along with its CEO and founder Tuan Pham, agreed to pay $3,043,484 to settle allegations that Phamatech violated the federal Anti-Kickback Statute and the False Claims Act.
The U.S. Attorney's Office said the allegations were originally brought in a lawsuit filed by former Phamatech employee John Polanco, who will receive $517,392 from the settlement proceeds.