PROVIDENCE – Poplar Healthcare and Poplar Healthcare Management LLC have entered into a civil settlement agreement with the United States through which the Memphis, Tenn.-based company will pay $897,640 to resolve allegations under the federal False Claims Act.
The agreement was announced in a press release issued by the U.S. Attorney’s Office, District of Rhode Island, on Monday.
Although Poplar is based in Memphis, it is licensed to conduct lab tests in Rhode Island and several other states.
The government, according to the release, alleges that Poplar, both directly and through its GI Pathology subsidiary, promoted and billed the government for diagnostic tests that the government says were not medically necessary.
An investigation by the Boston Office of Inspector General for the Department of Health and Human Services and the U.S. Attorney’s Office for the District of Rhode Island determined that the tests, known as immunohistochemical mast cell tryptase stains, were part of a multi-year promotional campaign designed to promote the use of the stain. The campaign claimed Poplar could use the test to definitively diagnose a condition known as “mast cell enterocolitis.”
However, the government alleged that Poplar’s promotion of the test was not consistent with U.S. Food and Drug Administration approval requirements, and also was not supported by enough scientific evidence.
“Federal funding for diagnostic tests and procedures is predicated on the principle that those tests are ordered because they are medically necessary and in the best interest of patients, and not on other, inappropriate factors,” Acting U.S. Attorney Stephen G. Dambruch said in a statement. “We will continue to take aggressive action to address situations where profit, rather than the best interests of patients, drives the decision to conduct and bill for medical tests.”
Special Agent in Charge Phillip Coyne, U.S. Department of Health and Human Services Office of Inspector General, said the agency will continue to investigate health care providers that bill Medicare for unnecessary services to boost profits.
Dr. Gordon Wang, a pathologist previously employed by Poplar, filed a complaint against the company on behalf of the United States in the U.S. District Court for the District of Rhode Island, triggering the investigation.
Under the False Claims Act, a private individual who has uncovered fraud against the federal government may file a suit in federal court on behalf of the United States. Wang will receive $205,841 from the proceeds of the settlement.
