Alleged Fraud on the Government Costs Biotech Company $49 Million

  • The U.S. Department of Justice (“DOJ”), the Department of Health and Human Services (“HHS”), and a number of states, including North Carolina AG Josh Stein, reached a settlement with biotechnology company Progenity Inc. to resolve allegations that it engaged in a fraudulent billing scheme and paid kickbacks to physicians for ordering its prenatal tests in violation of the federal False Claims Act.
  • The complaint, which was brought by the U.S. Attorney for the Southern District of New York and arose from a whistleblower complaint, alleged that, among other things, Progenity fraudulently miscoded its tests in bills submitted to Medicaid, TRICARE (the Department of Defense healthcare program), and the Department of Veterans Affairs healthcare program, resulting in payments for tests it did not perform and for tests that were non-reimbursable. In addition, Progenity allegedly engaged in a kickback scheme that paid illegal “draw fees” to physicians who prescribed its tests.
  • Progenity will pay approximately $19.5 million to the United States, $16.4 million to resolve similar claims relating to TRICARE in a separate suit in the Southern District of California, and approximately $13.15 million to various states under a separate settlement to settle claims relating to state Medicaid.