Daniel Hurt, a Florida businessman who owned and operated several healthcare companies, has agreed to pay over $27 million to resolve allegations of Medicare fraud. The Department of Justice announced that Hurt and his companies conspired to submit false claims for cancer genomic (CGx) tests that were not medically necessary and procured through illegal kickbacks.
Hurt's companies include Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC, and Sonoran Desert Pathology Associates LLC. They have also agreed to be excluded from Medicare, Medicaid, and all other federal health care programs by the Department of Health and Human Services Office of Inspector General (HHS-OIG). Previously, Hurt pleaded guilty to criminal healthcare fraud related to these offenses. The civil settlement is based on Hurt’s ability to pay.
The United States alleged that from January 2019 to November 2021, Hurt conspired with telemarketing agents to solicit Medicare beneficiaries for “free” CGx tests. He worked with telemedicine providers to prescribe unnecessary CGx tests and collaborated with reference laboratories for testing. Additionally, billing laboratories and a hospital submitted claims for payment to the Centers for Medicare and Medicaid Services.
“We will not tolerate those who prey on older Americans to defraud Medicare,” said Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “As this settlement reflects, we will use our available resources to protect federal health care programs and the beneficiaries they serve.”
U.S. Attorney Roger B. Handberg for the Middle District of Florida emphasized the commitment to protecting patients from unnecessary testing: “Unnecessary medical services and false claims for medical services threaten patients and our public health programs.”
“Our office is committed to pursuing those who threaten our government healthcare programs by submitting false claims for medically unnecessary services that are tainted by unlawful payments,” added U.S. Attorney Markenzy Lapointe for the Southern District of Florida.
U.S. Attorney Philip R. Sellinger for the District of New Jersey noted the severity of such schemes: “Schemes that seek to siphon money from these programs with unnecessary medical tests are especially egregious.”
Deputy Inspector General Christian J. Schrank of HHS-OIG stated: “Submitting false claims for medically unnecessary services jeopardizes the integrity of vital health care programs... This substantial settlement underscores our steadfast dedication to safeguarding federal health care programs.”
The settlement resolves allegations brought in three cases filed under the qui tam or whistleblower provisions of the False Claims Act (FCA), including an action filed by Robert Gerstein, a minority owner at Sonoran Desert Pathology who ran billing operations for CGx tests under Hurt's direction. Under FCA provisions, private parties can file actions on behalf of the United States and receive a portion of any recovery; Gerstein will receive up to $4.7 million or 17% of the government’s recovery.
This resolution was achieved through coordinated efforts among various branches within the Justice Department and U.S. Attorneys' Offices across multiple districts with assistance from HHS-OIG.
The investigation highlights ongoing efforts by authorities to combat healthcare fraud using tools like the False Claims Act. Tips about potential fraud can be reported at 800-HHS-TIPS (800-447-8477).
The resolved claims are allegations only; there has been no determination of liability.