A former laboratory CEO, two Texas physicians, and seven marketers have agreed to pay more than $6 million. This settlement resolves allegations they took part in kickback schemes. These schemes funneled taxpayer dollars into fraudulent lab testing referrals.
Christopher Grottenthaler, the former CEO of True Health Diagnostics, will pay $4.25 million to settle claims. He allegedly arranged kickbacks disguised as consulting fees. These included MSO (management service organization) distributions, processing fees, and even waived patient copays. These actions were to induce doctors to order unnecessary lab tests.
Two physicians, Dr. Hong Davis of Plano and Dr. Elizabeth Seymour of Denton, agreed to pay a combined $358,842. Both were accused of accepting MSO payments to draw business to True Health, Little River Healthcare, and Boston Heart Diagnostics.
Seven marketers will pay nearly $1.46 million for illegally routing MSO payments to doctors to generate referrals. They are Courtney Love, Stephen Kash, Laura Howard, Jeffrey Parnell, Stanley Jones, Jordan Perkins, and Ruben Marioni.
These settlements are part of a wider federal crackdown. The Department of Justice has recovered over $59 million. This recovery is from more than 50 doctors and other participants in similar MSO-based lab testing kickback schemes.
“Kickbacks to doctors can undermine medical decision-making, subject patients to wasteful treatments, and squander taxpayer money,” said Assistant Attorney General Brett A. Shumate.
This case was sparked by a whistleblower lawsuit filed under the False Claims Act by STF LLC, whose members will receive $148,750. The lawsuit continues against other defendants.
Why It Matters
Lab testing is essential for patient care. When executives and doctors put profits ahead of patients, the medical system is corrupted.
At Find Corporate Waste, we track these schemes to hold bad actors accountable. If you have information about healthcare fraud, waste, or abuse, you can report it confidentially. Reach out to us at info@findcorporatewaste.com.
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