Admera Health LLC (Admera) has agreed to pay the United States $5,389,648 to resolve allegations that it violated the False Claims Act by paying commissions to third-party independent contractor marketers in violation of the Anti-Kickback Statute (AKS). Admera will also pay an additional $147,851 to individual states for claims paid to Admera by state Medicaid programs.
Admera is a New Jersey-based company that provides biopharmaceutical research services for healthcare institutions and provided clinical laboratory testing services related to pharmacogenetics until 2021. Pharmacogenetics analyzes how a patient’s genetic attributes affect their response to therapeutic drugs. The settlement announced today resolves allegations that, from Sept. 1, 2014, through May 21, 2021, Admera made commission-based payments to independent contractor marketers in return for recommending or arranging for the ordering of genetic testing services in violation of the AKS. The AKS prohibits offering or paying remuneration in return for arranging for or recommending items or services covered by Medicare and other federally funded programs.
“The law prohibits health care providers, including those that provide laboratory services, from paying kickbacks in the form of commissions to third parties as an inducement to generate business,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to holding accountable those who engage in kickback arrangements that undermine the integrity of federal healthcare programs.”
“By entering into kickback arrangements, health care companies can cause providers to make medical decisions that are motivated by financial gain rather than the patient’s best interest,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Our office is committed to ensuring the accountability of participants in the health care system who put their own financial needs ahead of patient welfare.”
“Kickbacks can negatively influence medical decision making and corrupt the legitimate doctor-patient relationship,” said Special Agent in Charge Steven J. Ryan of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “This settlement demonstrates HHS-OIG’s commitment to identifying and holding accountable those who allegedly engage in unlawful financial relationships at the expense of Medicare patients and the taxpayer.”
As part of the settlement, Admera has admitted that it made millions of dollars in commission payments to independent-contractor marketers (the Marketers) to induce them to arrange for or recommend that healthcare providers order and refer clinical laboratory services to Admera, including genetic tests reimbursable by Medicare and/or Medicaid. It paid Marketers through arrangements considering the volume and value of genetic testing referrals despite being informed that such payments did not comply with AKS but continued these contracts.
The civil settlement includes resolving claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators Sunil Wadhwa and Ken Newton, co-founders of Financial Halo LLC/MedXPrime, a former third-party marketer for Admera. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Wadhwa and Newton v. Admera Health LLC et al (E.D. Cal.). Relators will receive $862,343 from the settlement proceeds.
The resolution obtained was due to coordinated efforts between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; and U.S. Attorney’s Office for Eastern District California with substantial assistance from HHS-OIG.
Trial Attorney Elizabeth J. Kappakas from Civil Division's Fraud Section and Assistant U.S. Attorney Colleen Kennedy from Eastern District California handled this matter.
The investigation illustrates government emphasis on combating healthcare fraud using tools like False Claims Act effectively against potential frauds reported via tips at 800-HHS-TIPS (800-447-8477).
The claims resolved by this settlement are allegations only; there has been no determination of liability.