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Laboratory and Physician Settle False Claims Act Allegations of Illegal Payments To Referring Physicians

Serving Families Throughout Chicago

Medstar Laboratory, Inc. (Hillside, Illinois) and Srinivas Kota MD, S.C. (Bolingbrook, Illinois) have agreed to pay a combined approximately $750,000 arising out of False Claims Act claims alleging that Medstar would pay help pay the compensation of its referring doctors’ payroll expenses in exchange for referrals. Medstar agreed to pay $508,685.84 and Srinivas Kota MD, S.C. agreed to pay $241,489.01.

The settlement resolves allegations that were originally brought in a lawsuit filed by a former employee at Srinivas Kota MD, S.C., under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the government and share in any recovery. The qui tam case is captioned United States ex rel. Bloomquist v. Medstar Laboratory, Inc, Civil Action No. 18-CV-2744 (N.D. Ill.).