Strata Pathology: Consulting Fees Without Consulting

In the Strata Pathology settlement, StrataDx agreed to pay $558,793 to resolve allegations that sham consulting fees and private-payer discounts bought Medicare and Medicaid referrals. Someone who knew the practice accounts could see a part of the arrangement that a Medicare claim alone would never explain.

The Department of Justice announced the civil settlement on October 1, 2015. The case against the Lexington-based pathology laboratory began with a former employee’s False Claims Act complaint.

Consulting Fees Without the Work

Strata acknowledged paying consulting fees to two referring physician practices that provided no consulting services in return, according to the Justice Department’s account of the settlement agreement. The payment had a business description. The work behind that description was missing.

The government’s allegation was that these payments induced physicians to send Medicare and Medicaid patients to Strata. A contract can name a service, and an invoice can repeat the name. What matters to our review is who did the work, what they produced and how the payments related to the business the practice sent back.

Patients depended on physicians choosing a laboratory for its medical work. The alleged bargain gave the practice a financial reason to send them to Strata.

Private-Payer Discounts Left the Practice a Margin

Strata also acknowledged entering account-billing arrangements with seven referring physician practices that facilitated fee-splitting. The government described the arrangement plainly: Strata performed the pathology services, but the physician practices billed their patients’ private insurers directly.

Strata then charged the practices deeply discounted prices for that work. The practices could keep the difference between what they paid Strata and the insurers’ full reimbursement. The alleged benefit was built into the price charged to the practice, rather than arriving as a separate consulting payment.

Those same practices allegedly sent specimens from federal health care program beneficiaries to Strata. For that business, Strata billed the federal programs at its full price. The practice received the private-payer margin. The lab received the federal business.

Why the Federal Case Reached Private-Payer Discounts

The government alleged that Strata’s Medicare and Medicaid claims were false because they resulted from payments and discounts that violated the federal Anti-Kickback Statute. The private-insurance side supplied the financial benefit that allegedly helped secure the federal referrals.

There was a telling detail in the Justice Department’s description of the arrangements: the account-billing terms did not explicitly condition discounts on Medicare and Medicaid referrals. The government nevertheless alleged that Strata offered the discounts with an understanding that participating physicians would send virtually all their patients to the lab, including those covered by the federal programs.

For Strata, the alleged account-billing arrangement put the private-insurer claim in the practice’s hands even though Strata performed the pathology services.

What Proof Do You Need as a Whistleblower?

For a referral-payment case like Strata’s, we connect the practice’s financial benefit to the specimens it sent and the claims the laboratory submitted.

Referral volume matters because the government alleged an understanding about virtually all the practices’ patients. We examine how the relationship operated alongside the written terms: what business was discussed, what specimens arrived and which payer was billed. The question is how the financial arrangement and the referral decisions fit together.

Laboratory records can give that account more substance. The 1997 Laboratory Medicine article Model Plan Helps Laboratories Fight Fraud described the Inspector General’s recommendations for requisition forms carrying physician-supplied diagnosis information and for retaining and analyzing test-use data by billing code. Requisition forms show what physicians requested. Test-use data show what the laboratory performed.

In our review of a referral arrangement, those records sit beside the contract, the consulting work and the payer accounts. They help connect the commercial relationship to the testing business it produced. An employee who knows the practice accounts and an employee who knows the incoming specimens may be seeing different parts of that connection.

The Later Settlement Over Free Access to Systems

The Department of Health and Human Services’ Office of Inspector General recorded a separate $100,000 civil monetary penalty settlement with Strata Pathology Services on November 17, 2025, concerning alleged free access to systems. This was an administrative settlement, distinct from the earlier False Claims Act resolution over consulting payments and account-billing discounts.

The earlier matter concerned money paid to practices and discounts that left them a billing margin. The later entry concerned access provided without charge.

Miraca’s Technology Benefits

Miraca Life Sciences, later Inform Diagnostics, faced allegations of electronic-health-record subsidies and free or discounted technology consulting for referring physicians, compared with the consulting payments and private-payer discounts alleged in Strata’s case.

The Strata Case and Whistleblower Rewards

A former Strata employee brought the complaint that led to the civil settlement. The Justice Department said the settlement amount would be shared among the United States, the whistleblower and the Commonwealth of Massachusetts.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For someone inside a pathology business, the starting point for a conversation with us may be the consulting work that never happened, the prices offered to a practice or the referrals expected in return.

You Know What the Practice Received

If you know the consulting invoices, account-billing prices or referral discussions behind a pathology lab’s business, speak to one of our whistleblower experts about what the practice received. We build your strongest laboratory kickback whistleblower case with you and bring in healthcare fraud whistleblower lawyers who understand these referral arrangements. We stay alongside you through the whole process.