Federal authorities have recovered more than $61 million since 2019 from alleged healthcare kickback schemes involving managed service organization (MSO) investment distributions, and a newly announced settlement exceeding $2 million adds to that total.
The latest matter involves former laboratory executives, marketers, and a physician who agreed to resolve allegations that doctors received illegal payments connected to laboratory referrals reimbursed by Medicare, Medicaid, and TRICARE. Federal authorities pursued the matter under the False Claims Act, alleging violations of the Anti-Kickback Statute.
The Allegations Behind the $2 Million Settlement
Payments described as managed service organization (MSO) distributions sit at the heart of the government’s allegations. Prosecutors claimed the payments were tied to laboratory referrals billed to Medicare, Medicaid, and TRICARE.
Former Boston Heart Diagnostics CEO Susan Hertzberg and former Vice President of Sales Matthew Theiler will pay a combined $1.2 million, while physician Frederick Brown, several marketers, and related entities will pay an additional $859,055, bringing the total settlements to more than $2 million.
The government contended that the MSO distributions were used to induce referrals for laboratory testing, forming the basis of False Claims Act litigation tied to alleged violations of the Anti-Kickback Statute. The settlements resolve civil allegations and do not constitute findings of liability.
What the Settlement Says About MSO Arrangements
Since 2019, federal authorities have secured more than $61 million in civil False Claims Act settlements involving alleged kickbacks disguised as MSO investment distributions, including recoveries from more than 50 physicians.
The settlement announcement also referenced allegations that concerns about the referral arrangements were raised before aspects of the business expanded. The matter was resolved through settlement, leaving those allegations untested in court.
The latest settlement adds to that total and involved allegations tied to physician referrals, laboratory testing, and payments made through MSO arrangements.