Arkansas Pathology Lab and U.S. Reach $30 Million Settlement Over Referral and Billing Allegations

Advanced Pathology Solutions PLLC and its owners agreed to pay the United States $30 million to resolve allegations that the laboratory provided kickbacks to gastroenterology practices in exchange for pathology testing referrals. The settlement also resolves claims that the laboratory ordered medically unnecessary special stains and confirmatory tests billed to Medicare and Medicaid.

The alleged conduct took place from January 2015 through July 2022.

U.S. District Court for the Eastern District of Arkansas, case United States ex rel. Watkins v. 4:20-cv-1110, and consolidated cases.

The settlement imposes a five-year Corporate Integrity Agreement on the laboratory. The agreement requires the laboratory to implement compliance measures monitored by the Department of Health and Human Services Office of Inspector General. The $30 million payment returns funds to federal healthcare programs that reimbursed the improper claims.

This settlement is the largest recent False Claims Act recovery involving pathology laboratory kickbacks tied to gastroenterology referrals. Laboratories and referring practices operating under similar referral arrangements now face heightened scrutiny from enforcement agencies applying the same kickback standards.