California Lab Owners Indicted For $214 Million Medicare Test Fraud

The U.S. Department of Justice has indicted Imran Shams and Lourdes Navarro, both 63 and owners of Matias Clinical Laboratory (Baldwin Park, CA), for their alleged roles in a $214 million Medicare billing fraud scheme.

The DOJ says that the married couple arranged for Matias to pay kickbacks to third-party marketers in exchange for specimens and test orders. Matias would then perform testing and pay the marketers a percentage of the reimbursements it received, including from the Medicare program.

Matias (dba Health Care Providers Lab) billed the Medicare program for $214 million of lab test claims between August 2018 and March 2022. This amount included $143 million of fraudulent claims for Covid-19 and respiratory pathogen tests that were submitted without regard to medical necessity, according to the DOJ. As a result of these alleged fraudulent claims, Matias received total Medicare payments of $29 million, including $18 million for Covid-19 and respiratory pathogen tests.

The DOJ alleges that Shams and Navarro used the Pandemic for their own financial gain by bundling Covid-19 tests with more expensive respiratory testing, irrespective of whether the testing was medically necessary.

DOJ says that Shams and Navarro transferred money from Matias to shell companies, Nurse Plus and Proworx, to launder money. The pair then withdrew this money to fund real estate transactions and to purchase luxury items and goods and services for their personal use.

Furthermore, the DOJ says that Shams fraudulently concealed his role at Matias and his prior criminal convictions. Shams had been excluded from all participation in Medicare since being convicted in 2000 for felony grand theft related to Medicare and Medi-Cal billing fraud.

Separately, Laboratory Economics notes that the HRSA uninsured program has paid Matias/Health Care Providers Lab $2 million for Covid-19 testing plus another $15.9 million for treating Covid-19 patients.