Quest pays $13 million over Giants suite kickback claims

Quest Diagnostics paid $13,014,576 plus interest to resolve allegations that it submitted false claims to Medicare and to New York and New Jersey Medicaid, the U.S. Attorney’s Office for the District of New Jersey announced on Nov. 6. The government says Quest used free New York Giants suites and events to win lab referrals. The claims are allegations only, and there has been no determination of liability.

The settlement covers July 25, 2013 to Aug. 3, 2022. The perks came from Quest’s 2013 naming rights and sponsorship agreement with the Giants. Prosecutors list four kinds of events: suite seats at MetLife Stadium for home games with food and alcohol, a VIP section at training camp, draft “chalk talks” hosted by Giants alumni, and family combine days with drills led by players.

How the program worked

Prosecutors say Quest aimed the events at decisionmakers at current and prospective client accounts who could send lab work its way. Executives and sales representatives targeted the highest value accounts to get the most return. Sales reps had to attend with the people they invited. Quest tied specific sales goals to the Giants invitations and shared those goals with senior management.

Quest measured the payoff. For the 2013 through 2016 seasons, it compared each client account’s revenue for up to a year after an event with its revenue before the event, the government says. Quest then billed Medicare and New York and New Jersey Medicaid for tests referred from the accounts it had entertained.

“Kickbacks to referring providers, especially by lab companies, corrupt medical judgment, lead to unnecessary lab testing, cause providers to steer patients to labs that offer inducements, and squander taxpayer money,” U.S. Attorney Robert Frazer said.

What the integrity agreement requires

Quest also signed a five year Corporate Integrity Agreement with the HHS Office of Inspector General. An independent review organization will evaluate Quest’s risk assessments and its audits of anything of value exchanged with referral sources.

The case started as a whistleblower suit, U.S. ex rel. Rabin, et al. v. Quest Diagnostics, Civil Action 20-cv-02752 in federal court in New Jersey. The three relators, Gerard Abate, M.D., Lori Anderson and Douglas S. Rabin, M.D., share $2,472,769 of the recovery.

Quest’s response

Quest denies wrongdoing and said it settled to “put the matter behind us,” spokesperson Amanda Rivera told Gothamist. “Since last year, we have shared information about this settlement, which includes a Corporate Integrity Agreement, with the public through our regulatory filings,” she said. “In many respects, the CIA mirrors our existing rigorous compliance program, and we have been complying with its requirements.”

Why it matters

The government counted stadium hospitality as remuneration under the Anti-Kickback Statute, which bars offering anything of value to induce referrals that Medicare, Medicaid and other federal programs pay for. The evidence it cites is Quest’s own math: invitations tied to sales goals and revenue tracked account by account after each event. Any lab, device or health tech sales team that measures client entertainment against referral revenue keeps the same kind of record.

The integrity agreement runs five years and puts an outside reviewer on Quest’s referral source audits. That review comes as Quest grows its consumer channel. On Nov. 3 we reported that Apple’s redesigned Health app will book a $119 Quest blood panel of more than 50 biomarkers at about 2,000 Quest locations.