In Brief: San Diego Lab Settles Kickback Charges; CMS Extends Medi-Cal Waiver

San Diego Lab Settles Kickback Charges

San Diego-based laboratory Pathway Genomics and the U.S. Attorney's Office announced the former will pay $4.03 million to settle a whistleblower lawsuit.

The agreement settles allegations that Pathway violated federal anti-kickback laws by paying physicians as much as $20 for each saliva sample of a patient it remitted for genetic testing pertaining to medication sensitivity. According to the U.S. Attorney, some physicians received more than $13,000 worth of these payments, and many physicians did not use Pathway's laboratory services prior to receiving such payments.  

“The defendants allowed greed to corrupt their trusted relationship with their patients and ultimately affect patient care decisions,” said Eric S. Birnbaum, the FBI agent in charge of the investigation. “(The settlement) should make it abundantly clear that the FBI and our law enforcement partners will not allow kickbacks and bribes to influence patient care decisions.”

The feds were tipped off by a whistleblower, former Pathway sales executive Monique Gipson. She filed a qui tam suit against the company in April 2014. 

“Pathway admits no wrongdoing as part of the settlement and is neither an admission of liability or wrongdoing by the Company, nor a concession by the United States that its claims are not well founded,” the company said in a statement. Pathway has fully cooperated with the inquiry and was not required to enter into a corporate integrity agreement. We now consider this matter closed.” 

CMS Extends Medi-Cal Waiver Through End Of Decade

The Centers for Medicare & Medicid Services has extended California’s 1115 demonstration waiver for the Medi-Cal program through 2020.

The waiver, known Medi-Cal Demonstration 2020, is intended to build on the prior “Bridge to Reform” waiver. It will include $6.2 billion in funding over the next five years.

The prior initiatives under the waiver that will continue to operate include the Medi-Cal managed care program; community-based adult services; the Coordinated Care Initiative; Cal MediConnect; and the Drug Medi-Cal Organized Delivery System.

Among the new initiatives that are included in the waiver are global payments to public hospitals to care for certain segments of patients, with the intention of promoting more preventative care and care outside of the outpatient setting; an initiative that would pay dentists participating in the Medi-Cal program an additional $750 million a year to treat children; and a “whole person care” initiative that is intended to  integrate physical, behavioral health and social services into the care of some patients with chronic conditions. Participants in this particular initiative may also provide supportive housing to some Medi-Cal enrollees. Such housing, particularly for the long-term homeless, is considered one way to cut down on hospital admissions and related costs. The waiver will fund the whole person care initiative to the tune of $300 million a year, for a total of $1.5 billion for the course of the new waiver.