Diagnostic Laboratories pays $19.4 million for kickbacks to skilled nursing facilities

Diagnostic Laboratories and Radiology will pay $19.4 million to the federal government and State of California for allegations it provided kickbacks to skilled nursing facilities.

The information was revealed by two former employees who became whistleblowers who also claim that they were fired from DLR after they reported the billing practices to the authorities.

In the suit, the former employees alleged that DLR would charge deeply discounted rates for lab and radiology services , sometime $1 per day per patient to skilled nursing facilities in return for the SNF’s referral of ¬†additional out patient work to DLR who would charge the government the maximum allowable for the service.

The case is similar to cases currently pending against Quest and LabCorp in which it is also alleged that they provided deep discounts for lab work for patients with private insurance in order to induce billions of dollars worth of Medicare lab referrals.

Diagnostics Labs does business with many skilled nursing facilities.

Jeffrey Newman represents whistleblowers