Monday, November 23, 2015

New York Doctor Sentenced To 46 Months In Prison For Payments for Test-Referrals With New Jersey Clinical Lab. Payments Were Made to Doctors Under Lease, Consulting, Service or Management Agreements With Doctors Where Referrals Occured Were Called "Bribes" or "Kickbacks" and Agreements Were Called "Sham"

A doctor, Brett Halper MD, with a practice in Rockville Centre, New York, was sentenced November 18, 2015 to 46 months in prison for accepting payment in exchange for test referrals from by Biodiagnostic Laboratory Services LLC (BLS) in New Jersey billed to Medicare. Dr. Halper plead guilty in Newark federal court and did not go to trial.

This was part of a large investigation which resulted in 38 guilty pleas – 26 of them doctors – in connection with the lab kickback arrangement. The investigation has so far recovered more than $11.5 million to date through forfeiture.

The fact that 26 doctors were charged shows that simply because a large number of physicians enter into these arrangements does not mean that they are legal or will pass muster. The government contended that these were "sham" agreements even though attorneys had drafted them.

The lab BLS and four of its executives were also charged. The referral or "bribe" arrangements were the ones that were common in the clinical lab business: lease, service or consulting agreements.

According to documents filed in this and related cases and statements made in court:
Dr. Halper admitted that from January 2011 through April 2013, he accepted payments (bribes) in return for referring patient blood specimens to BLS and was often paid in excess of $5,000 per month. Dr. Halper’s referrals generated approximately $2,900,000 in lab business for BLS.

In addition to the prison term, Judge Chesler sentenced Dr. Halper to serve two years of supervised release and fined him $100,000. Dr. Halper must also forfeit $325,000. 

This is a long sentence for a physician who pleaded guilty. Dr. Halper appeared to be well represented by a New York attorney but the government is taking a hard line position on these cases and the sentences even with a plea are longer than those that used to be imposed in white collar criminal cases. In addition, in a case like this there is not room for the type of cooperation the government wants in order to give lower sentences since the arrangement was with a laboratory and no one else.  


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