Washington, DC, June 1, 2022 – Caris Life Sciences, a clinical laboratory based in Texas, has agreed to pay more than $2.8 million to the federal government to settle a whistleblower lawsuit filed under the False Claims Act brought by a Phillips & Cohen LLP client. The lawsuit alleges Caris engaged in a coordinated effort to delay potentially life-saving diagnostic medical tests between 2007 and 2017, allowing Caris to benefit from billing Medicare for reimbursements to which they were not entitled.

“Delaying potentially life-saving tests to increase profits is unconscionable,” said Erika Kelton, a whistleblower attorney and partner at Phillips & Cohen. “The whistleblower was brave to come forward to stop this scheme from harming more people.”

According to the whistleblower complaint, Caris provides life-saving molecular diagnostic tests to help guide physicians’ treatments for cancer patients. The tests can offer highly valuable information about a patient’s condition and specific approaches to treatment. During the time covered by the settlement, tests ordered within 14 days of a patient’s discharge from a hospital should have been reimbursed by Medicare under the “14-day rule,” as part of a bulk reimbursement process that pays hospitals for tests during an inpatient or outpatient stay and 14 days after a patient is discharged.  In such situations, diagnostic tests are included as part of the services provided during a hospital stay and are not eligible for payment beyond what Medicare reimburses the hospitals. Diagnostic tests ordered more than 14 days after a patient is discharged from a hospital are generally separately reimbursed by Medicare Part B, based on an established fee schedule.

The whistleblower complaint alleges that Caris, using different schemes, conspired to make sure tests were billed after the “14-day rule,” even for tests performed within 14 days.

The False Claims Act empowers whistleblowers to sue individuals and entities that are defrauding the federal government and recover funds on the government’s behalf. The law offers whistleblowers protection against job retaliation and rewards ranging from 15% to 25% of the amount recovered when the government joins the qui tam case. Learn more about qui tam cases.

“Our client felt strongly that these billing practices were putting people’s lives at risk and knew that filing a qui tam lawsuit was the best way to get the government to investigate,” said John Tremblay, a whistleblower attorney at Phillips and Cohen.

The case was brought by a Phillips &Cohen LLP whistleblower client whose name remains under seal by court order.

Read the Caris settlement agreement.

DOJ press release is posted here.

About Phillips & Cohen LLP

Phillips & Cohen represents whistleblowers in SEC whistleblower claims as well as qui tam lawsuits and the whistleblower reward programs of the Commodity Futures Trading Commission and the Internal Revenue Service. Its roster includes the founding Chief of the SEC Office of the Whistleblower as well as former government prosecutors and attorneys with decades of experience representing whistleblowers.

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