AG Curtis Hill settles with company that gave physicians kickbacks, overbilled Medicaid

Attorney General Curtis Hill announced today that Indiana has joined the federal government and 44 other states to settle allegations against Progenity, a San Diego-based biotechnology company that provides molecular and diagnostic tests to patients through health care providers.

The $49 million settlement will resolve allegations that Progenity fraudulently billed federal health care programs for prenatal tests and provided kickbacks to physicians to induce them to order Progenity tests for their patients. The settlement also resolves allegations that Progenity provided illegal kickbacks by:

1. Providing excessive “draw fees” that exceeded fair market value for blood specimens collected for Progenity tests;

2. Providing meals and happy hours for physicians and their staff that often involved little or no educational content; and

3. Improperly reducing or waiving patient coinsurance and deductible payments.

In the settlement agreement, Progenity makes extensive admissions regarding the company’s conduct with respect to both the fraudulent billing and kickback claims.

“When companies that work this closely with physicians behave improperly, it undermines the integrity of our health care system,” Attorney General Hill said. “The effects of Progenity’s actions trickled down to patients who saw doctors influenced by kickbacks and bribes. This settlement is a fitting end to this company’s unfortunate series of decisions.”

Under the settlement, Progenity will pay the states and the federal government $49 million for claims pertaining to various federal healthcare programs. More than $29 million of that money resolves claims relating to Medicaid, and $191,296.58 of the settlement resolves claims relating specifically to Indiana’s Medicaid program.

The settlement comes after a private whistleblower lawsuit that had previously been filed under seal in the U.S. District Court for the Southern District of New York under the Federal False Claims Act.

The settlement agreement is attached.

The Indiana Medicaid Fraud Control Unit receives 75% of its funding from the U.S. Department of Health and Human Services under a federal grant. The remaining 25% is funded by the State of Indiana.