Balance Diagnostics USA, LLC, a diagnostic testing facility in Cedarhurst, New York, has agreed to pay $2.5 million to settle False Claims Act allegations. The company admitted to paying kickbacks to physicians to secure patient referrals, violating the federal Anti-Kickback Statute. These kickbacks were disguised as rent payments and were based on the volume of patient referrals.

Details of the Settlement
From January 2009 to December 2019, Balance Diagnostics engaged in sham office rental arrangements with over 100 physicians and their practices in the New York City area. The payments often exceeded fair market value and were tied directly to the number of patient referrals for diagnostic testing services performed by Balance staff.

Admissions and Penalties
Under the settlement, Balance Diagnostics admitted to determining rent payments based on anticipated patient referrals. The company agreed to pay $1,725,850 to the U.S. and $774,150 to the State of New York. Additionally, Balance executed judgments for a total of $6.2 million, which may be enforced if the payments are not made as required.

Looking Forward
This settlement underscores the importance of compliance with federal health care laws. It also highlights the role of whistleblowers in bringing fraudulent activities to light. For assistance with Kickback, False Claims Act and compliance issues, contact Parrella Health Law at 857.328.0382 or email me at cparrella@parrellahealthlaw.com. We’re committed to helping healthcare providers navigate complex compliance challenges.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)