The lab was accused of billing Medicare for medically unnecessary respiratory pathogen panel testing.
DALLAS — A Dallas lab and its owners are getting ready to pay $24 million to U.S. officials to resolve allegations that they billed Medicare for medically unnecessary respiratory pathogen panel testing performed on seniors receiving COVID-19 tests. Information on the payment was detailed in a U.S. Department of Justice press release.
The lab is settling the claims, meaning there has been no determination of liability for the allegations by the DOJ.
Magnolia Diagnostics, the lab, and its owners, John Bains and Kelly Bains agreed to pay $19.2 million, federal officials said. Investors of the lab will also pay $4.8 million over allegations that they unjustly enriched themselves with distributions from Magnolia.
The Bains devised a strategy to generate revenue by requiring senior living communities to obtain expensive respiratory pathogen panels to receive COVID-19 testing, according to the release.
U.S. officials said in the release that Magnolia would use administrative forms that preselected the expensive testing before any patient assessments occurred. The lab would allegedly authorize these expensive tests for whole communities without provider signatures.
John Bains would allegedly threaten to withhold COVID-19 testing from communities that asked not to receive the pathogen panels, U.S. officials said. He’s also alleged to have altered provider signatures.
When the lab did conduct those expensive pathogen panels, they would freeze specimens for as long as months before testing them. Those results couldn’t inform treatment at that point, U.S. officials claimed in the press release.
The payment is the result of a coordinated effort by multiple agencies, including the DOJ and the U.S. Attorney’s Office for the Northern District of Texas.