Lab Company to Pay $10M to Resolve Rent-for-Referral Allegations

Frankie Rowland

July 25, 2022

A clinical laboratory and its parent company will pay $10 million to resolve allegations that the lab overpaid for rented office space from doctors so they would in turn make referrals.

Federal officials allege that beginning in January 2013 through last year, New Jersey–based BioReference Health LLC made lease payments to physicians and physician practices to induce the referrals, resulting in repeated violations of the Physician Self-Referral Law and the Anti-Kickback Statute.

BioReference rented the office space from the specific physician practices for patient service centers (PSCs), where patients could have their blood samples taken. When calculating lease payments, officials claimed BioReference inaccurately measured the amount of space it would use and included a disproportionate share of common spaces. BioReference further admitted that in deciding whether to open, maintain, or close PSCs, it would analyze referrals from nearby healthcare providers.

BioReference and its parent company OPKO conducted multiple internal audits that showed that the payments to the physician landlords exceeded fair market value; however, BioReference did not report or return overpayments to federal healthcare programs.

Allegations were first brought against the lab in a whistleblower lawsuit filed in Massachusetts by a former employee. As a result of the settlement, the whistleblower will receive $1.7 million, officials said.

BioReference is one of the largest clinical laboratories in the country. Ten states have BioReference laboratory locations, totaling 118 BioReference laboratories in the US. However, the alleged actions occurred in selected laboratories in Massachusetts and Connecticut, according to the US Department of Justice.

Frankie Rowland is an Atlanta-based freelance writer.

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