Florida man agrees to pay $27M for cancer test scheme

FLORIDA—A Florida man has agreed to pay over $27 million for Medicare fraud in connection with cancer genomic tests.

Daniel Hurt, of Fort Lauderdale, who owned and operated several health services companies, has agreed to pay over $27 million to settle allegations that he and his companies submitted false claims and received illegal payments from Medicare for unnecessary cancer genomic tests.

The companies named in the agreement include Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC and Sonoran Desert Pathology Associates LLC.

Mr Hurt and each of the companies also agreed to be excluded from Medicare, Medicaid, and all other federal health care programs by the Department of Health and Human Services Office of Inspector General (HHS-OIG).

Hurt previously pleaded guilty to criminal healthcare fraud for these offenses. The civil settlement is based on Mr Hurt’s ability to pay.

The United States alleged that Mr Hurt, his companies and others conspired to knowingly submit false claims for CGx tests that were not medically necessary to treat or diagnose a condition, and that Hurt received and paid kickbacks in exchange for Medicare referrals, in violation of the Anti-Kickback Statute (AKS).

In particular, the United States alleged that, from January 2019 to November 2021, Hurt conspired with telemarketing agents to solicit Medicare beneficiaries for “free” CGx tests; with telemedicine providers to “prescribe” CGx tests that were not medically necessary; with reference laboratories to conduct the CGx tests; and with billing laboratories and a hospital to submit claims for payment to the Centers for Medicare and Medicaid Services.

“Our office is committed to pursuing those who threaten our government healthcare programs by submitting false claims for medically unnecessary services that are tainted by unlawful payments to marketers,” said U.S. Attorney Markenzy Lapointe for the Southern District of Florida.

“Unnecessary medical services and false claims for medical services threaten patients and our public health programs,” added U.S. Attorney Roger B. Handberg for the Middle District of Florida.

This settlement includes the resolution of allegations brought in three cases filed under the qui tam or whistleblower provisions of the FCA, including an action filed by Robert Gerstein, a minority owner of Sonoran Desert Pathology.

Under the FCA, private parties can file an action on behalf of the United States and receive a portion of any recovery. Under the resolution, Mr Gerstein will receive up to $4.7 million, or 17 percent of the government’s recovery.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, Corporate/Financial Litigation Section, U.S. Attorney’s Office for the Southern District of Florida, U.S. Attorney’s Office for the Middle District of Florida and U.S. Attorney’s Office for the District of New Jersey, with assistance from Office of Inspector General for the United States Department of Health and Human Services (HHS-OIG).

The matter was handled by Assistant U.S. Attorney Rosaline Chan for the Southern District of Florida, Trial Attorney Samson Asiyanbi of the Fraud Section, Trial Attorneys Augustus Curtis and Andrew Warner of the Corporate/Financial Litigation Section and Assistant U.S. Attorneys Jeremy Bloor for the Middle District of Florida and David Dauenheimer for the District of New Jersey and the Miami Regional Office of HHS-OIG.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.