Arkansas Lab Owner Indicted in $100 Million Billing Fraud

by Jondavid Klipp | Nov 15, 2021 | Fraud, Medicare, Toxicology

Arkansas Lab Owner Indicted in $100 Million Billing Fraud

A federal grand jury in the Western District of Arkansas has indicted Billy Joe Taylor, age 42, for an alleged scheme that billed Medicare for over $100 million dollars in fraudulent lab test claims between February 2017 and May 2021.

Taylor is the owner of several lab companies, including Vitas Laboratories (Barling, AR), Beach Tox (Torrance, CA), Nations Laboratory Services (Tecumseh, OK), Corrlabs (Southern Pines, NC) and Imaginus Diagnostic Laboratory (Spiro, OK).

Taylor allegedly used access to beneficiary and medical provider information from prior lab orders to submit fraudulent claims for urine drug tests, Covid-19 tests and respiratory pathogen panels, that were not actually ordered or performed. The complaint also alleges that hundreds of claims were submitted for beneficiaries after they had died or otherwise ceased providing samples.

Taylor used the proceeds of the fraud to live a lavish lifestyle, including purchasing numerous luxury cars, real estate, jewelry and guitars, according to the indictment.

Taylor is charged with 16 counts of health care fraud, and one count of engaging in a monetary transaction in criminally-derived property. Each of the counts is punishable by a maximum penalty of 10 years in prison. He is scheduled for his arraignment on November 23 before the U.S. District Court for the Western District of Arkansas.

MD Labs To Pay Up To $16 Million To Resolve Fraudulent Billing Allegations

by Jondavid Klipp | Nov 15, 2021 | MD Labs, Toxicology

MD Labs To Pay Up To $16 Million To Resolve Fraudulent Billing Allegations

Nevada-based MD Spine Solutions (doing business as MD Labs) and its two owners have agreed to pay up to $16 million to settle allegations that MD Labs submitted false claims to Medicare and Medicaid, according to the U.S. Department of Justice. The co-owners, Denis Grizelj and Matthew Rutledge, have admitted that MD Labs regularly billed federal healthcare programs for medically unnecessary urine drug tests (UDTs) between 2015 and 2019.

Typically, a relatively inexpensive UDT called a presumptive test will be used first to quickly determine the need for a confirmatory UDT. However, MD Labs had regularly performed and billed for both UDTs at the same time without physician-designated reflex orders in place. Since the presumptive test was no longer being used to call for secondary testing, many confirmatory UDTs were medically unnecessary, according to the DOJ.

The settlement states that MD Labs, Grizelj and Rutledge will pay the government no less than $11.6 million and up to $16 million based on MD Labs’ financial performance through 2026. CMS also temporarily suspended Medicare payments to MD Labs effective April 13, 2021 through November 3, 2021.

The DOJ’s case against MD Labs was initially set into motion in December 2018 by a whistleblower, Omni Healthcare (Melborne, FL), which will get 15% of the settlement amount. Omni Healthcare is a multi-specialty group with
seven offices located in the Orlando area.

The settlement amount is small potatoes compared with the total Medicare payments of $55 million that MD Labs received between 2015-2019, notes Laboratory Economics.

Enzo Biochem Hires New CEO; Investors Push For More Change

by Jondavid Klipp | Nov 15, 2021 | Enzo Biochem

Enzo Biochem Hires New CEO; Investors Push For More Change

Hamid Erfanian, age 52, has become Chief Executive Officer Enzo Biochem (New York City) effective November 8. Erfanian was most recently Chief Commercial Officer of Euroimmun, an IVD manufacturer owned by PerkinElmer (Waltham, MA). Former CEO Elazar Rabbani, PhD, age 78, will remain Chairman and will also serve as Enzo’s new Chief Scientific Officer.

Erfanian is set receive a base salary of $600,000 with eligibility for a bonus of between 30% and 100% of his base salary. Furthermore, Erfanian will receive 260,000 shares of Enzo stock plus options to purchase 700,000 more shares. Finally, he will get $60,000 for relocation expenses.
Restless Investors Seek More Change
Meanwhile, Bradley Radoff, a private investor who owns 7.5% of Enzo’s outstanding shares, says the CEO change does not go far enough. In an open letter to Enzo’s board, he said the shift was merely a way to prolong the 45-year tenure of Rabbani, who helped found Enzo in 1976. Radoff
is urging the board “to take swift action to prevent Dr. Rabbani from perpetually controlling the company, as if it is his own private fiefdom.”

Rabbani did not receive a majority of shareholder votes cast for his re-election at Enzo’s last annual meeting in January 2021. However, Enzo’s board refused to accept Rabbani’s resignation and he remains Chairman.

Other Enzo investors, including Harbert Discovery Fund (10.7% stake), Roumell Asset Management (6% stake), and James Wolf (5.4% stake), have also been pressuring the company to make changes (see LE, January 2021).

ARUP And Quest Raise Minimum Hourly Wage To $15

by Jondavid Klipp | Nov 15, 2021 | ARUP Laboratories, Quest Diagnostics

ARUP And Quest Raise Minimum Hourly Wage To $15

ARUP Laboratories (Salt Lake City, UT) says that it will increase its minimum hourly wage to $15 effective November 27. All new hires and approximately 600 employees who currently earn less than the new minimum will be paid $15 per hour or more. In addition, about 2,800 hourly employees who already earn more than $15 per hour also will get raises with the higher minimum hourly wage. ARUP has about 4,500 employees, most of whom work in University of Utah Research Park.

Effective November 7, Quest Diagnostics says that it will adjust its hourly rate to $15 for the small number of employees who were below that level. In addition, Quest will make a non-taxable payment ($500 for full-time employees and $250 for part-time and per diem) to approximately 47,500
employees to offset financial challenges due to the pandemic.

Finally, Quest noted that another year of pandemic pressures and travel restrictions have made it very difficult for many of its employees to take their paid time off (PTO). Therefore, Quest said it is providing a payout of most unused PTO for its hourly employees to ensure they don’t forfeit it at
the end of the year.

Recently, Labcorp also announced it was raising its minimum wage to $15 (see LE, September 2021).

Khani To Step Down As ACLA President

by Jondavid Klipp | Oct 15, 2021 | ACLA, American Clinical Laboratory Association

Khani To Step Down As ACLA President

The American Clinical Laboratory Assn. (Washington, DC) has announced that Julie Khani is resigning as President effective November 26. Khani, who has been ACLA President since January 1, 2017, has accepted a position as Vice President of Government Affairs at Hologic (Marlborough, MA). The ACLA Board of Directors has begun a national search for her successor.