The Secaucus-based company denies wrongdoing and will undergo five years of federal compliance oversight; the settlement does not determine liability.
SECAUCUS, NJ – Quest Diagnostics has paid $13,014,576, plus interest, to settle allegations that free New York Giants entertainment helped generate laboratory referrals billed to Medicare and Medicaid, federal prosecutors announced Nov. 6.
The civil settlement concerns alleged conduct from July 25, 2013, through Aug. 3, 2022. Prosecutors said Quest provided suite seats at MetLife Stadium, training-camp access and other events to health care decision-makers who could direct testing business to the company.
Quest denies the allegations. In a statement provided to News 12, the company said: “We wholeheartedly deny these allegations and the settlement contains no determination of liability.” It also said it had agreed to settle more than a year earlier to put the dispute behind it.
Prosecutors alleged that Quest targeted current and prospective accounts with referral authority and tracked revenue after entertainment events. The government contends that resulting claims paid by Medicare and New York and New Jersey Medicaid violated federal law.
The federal Anti-Kickback Statute prohibits knowingly and willfully providing things of value to induce referrals for services paid by federal health care programs. The issue in this case is the alleged use of entertainment to influence referrals, rather than a determination about the accuracy of individual laboratory results.
Quest also entered a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General. Prosecutors said it requires independent evaluation of risk assessments and audits involving payments or benefits exchanged with referral sources.
The case arose from a whistleblower lawsuit. The False Claims Act allows private parties to sue on the government’s behalf over allegedly false payment claims and, in successful cases, receive part of the recovery. This mechanism is known as a qui tam action.
The government said three whistleblowers will receive a combined $2,472,769. The case is U.S. ex rel. Rabin, et al. v. Quest Diagnostics, Inc. and John Doe Companies 1–10, Civil Action 20-cv-02752, in federal court in New Jersey.
The settlement resolves allegations. There has been no determination of liability.