Kevin S. Murdock, the former CEO and owner of the defunct Premier Medical, Inc. laboratory, has agreed to a consent judgment of $27,544,460. This settlement comes as Murdock acknowledged the likelihood of being found liable in a civil action brought by the United States and the states of Colorado, Georgia, and South Carolina for violations of federal and state False Claims Acts. The agreement was reached just one day before his trial was scheduled to begin.
This judgment adds to over $87 million in previous judgments and settlements secured by the governments against other defendants involved in the case.
The civil action, initiated on July 30, 2021, alleged widespread fraud, waste, and abuse against the Medicaid programs. A default judgment totaling over $71 million was previously entered against Premier Medical, Inc., which has since been terminated by the Medicaid agencies of the involved states.
The case revealed that Premier Medical and Murdock, along with others, paid illegal kickbacks for referrals of expensive cancer genetic (CGX) testing. They allegedly targeted Medicaid beneficiaries in states with favorable reimbursement rates for CGX testing, specifically Georgia, Colorado, and South Carolina. Marketers reportedly set up in public spaces in low-income areas, falsely advertising cancer screenings and enticing beneficiaries with payments of up to $20 for DNA samples. Samples were collected only from Medicaid cardholders, and test orders were then obtained from telemedicine companies where providers had no existing treating relationship with the beneficiaries. These tests were deemed medically unnecessary and obtained through kickbacks, violating federal anti-kickback statutes.
Other defendants in the scheme have also reached settlements. Robert Alan Richardson and Edward Burch, associated with Freedom Medical Labs, LLC, agreed to an $8 million consent judgment each, based on their ability to pay. Freedom Medical also agreed to a seven-year exclusion from federal healthcare programs. Michael Conroy, former Vice President of Compliance for Premier Medical, paid $15,000 and accepted a three-year exclusion for his role in facilitating the scheme.
In total, the governments have resolved this cancer genetic testing fraud scheme against all defendants for more than $114 million. The scheme cost the Georgia Medicaid program over $7 million, Colorado Medicaid over $6.5 million, and South Carolina Medicaid over $118,000.
This resolution stemmed from a whistleblower complaint filed under the False Claims Act by Karen Mathewson, a former Premier Medical employee. The successful outcome highlights the government’s continued focus on combating healthcare fraud through coordinated efforts between various federal and state agencies.
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