Dr. Bostwick Settles False Medicare Claims for $3.75M; Whistleblower to Get $2.5M
Dr. David G. Bostwick, former founder, owner, and chief executive officer of Bostwick Laboratories, has agreed to pay up to $3.75 million to the United States federal government for to resolve alleged violations of the False Claims Act, the U.S. Department of Justice announced earlier this month.
The settlement announced today resolves claims that Dr. Bostwick allegedly directed Bostwick Laboratories to bill Medicare and Medicaid for expensive cancer detection tests known as Fluorescent In Situ Hybridization (FISH) tests, as well as other tests, that were not medically necessary and were performed without the treating physicians’ consent or order. FISH tests are used to detect bladder cancer. During the time period covered by the settlement, Medicare reimbursement for FISH tests ranged from $456 to $966 per test.
The settlement also resolves allegations that Dr. Bostwick, through Bostwick Laboratories, offered various discounts and billing arrangements to treating physicians to induce physicians to refer business to Bostwick Laboratories in violation of the federal Anti-Kickback Statute. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
Under the settlement announced today, Dr. Bostwick has agreed to pay over $2.6 million plus an additional $1.125 million if certain financial contingencies occur within the next five years - for a total potential payment of up to $3.75 million. On Aug. 28, 2014, Bostwick Laboratories previously agreed to pay over $6.5 million to resolve the allegations in this lawsuit.
The allegations resolved by these settlements were originally brought by whistleblower Michael Daugherty, who works in the industry, under the qui tam provisions of the False Claims Act. The act permits private citizens to sue on behalf of the government those who falsely claim federal funds. The act allows the whistleblower to receive a share of any funds recovered through the lawsuit. Daugherty will receive over $2.5 million from the government’s settlements with Dr. Bostwick and Bostwick Laboratories.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.