On December 20, 2016, Thomas V. Savino, M.D., a doctor practicing in Staten Island, New York, was charged with accepting payments (bribes) in exchange for test referrals as part of a long-running marketing arrangement operated by Biodiagnostic Laboratory Services LLC (BLS) of New Jersey. He is the 30th physician charged who referred cases to BLS.
The cases arising out of BLS' operations is believed to be the largest number of medical professionals ever prosecuted in a kickback case. The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the marketing and kickback arrangements. Some of these were alleged sham lease, service and consulting agreements. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets. The investigation has to date recovered more than $12 million through forfeiture.
This case went to Indictment after Dr. Savino did not voluntarily plead guilty. According to the indictment, from July 2012 through April 2013, Dr. Savino allegedly received cash payments totaling at least $25,000 from BLS employees and associates. Dr. Savino’s referrals allegedly generated approximately $375,000 in lab business for BLS. The government is charging that the inducements were for Medicare and private insurance.
The sales representatives for BLS often used other entities to make payments. The government also alleges in many of these cases that the patients were never informed that the cases were referred to a laboratory where the physician would receive a payment.
The indictment charges Dr. Savino with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Dr. Savino will be arraigned at a later date.
Dr. Savino is the second physician to be indicted this month in connection with the BLS payments after a guilty plea was not obtained pre-Indictment. Dr. Ahmed El Soury was just indicted Dec. 13, 2016. The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. Another pending case is that of Dr. Bernard Greenspan who was indicted on March 14, 2016 and is scheduled for trial on Jan. 31, 2017.
The sentences for health care professionals in the BLS cases are faily long considering that they are first time offenders and involve many providers. Twelve of the doctors got sentences ranging from 12 to 63 months. For example, Dr. Brett Ostrager – who was indicted on August 11, 2015 and pleaded guilty on December 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. The sentences offered in plea agreements may be a reason why some providers would rather go to trial.
The sentences for health care professionals in the BLS cases are faily long considering that they are first time offenders and involve many providers. Twelve of the doctors got sentences ranging from 12 to 63 months. For example, Dr. Brett Ostrager – who was indicted on August 11, 2015 and pleaded guilty on December 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. The sentences offered in plea agreements may be a reason why some providers would rather go to trial.
The Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The emphasis on obtaining jail terms for physicians and pathologists will put great pressure on laboratories and physicians to be compliant. This is a huge risk for anyone entering into arrangements with any ancillary service provider such as a laboratory, diagnostic testing facility or pharmacy.
Posted by Tracy Green, Esq.
Phone: 213-233-2260
Email: tgreen@greenassoc.com
Green and Assocates, Attorneys at Law
