Guardant Health: A Promotion and a Job for the Doctor’s Stepdaughter

In the Guardant Health Stark settlement, the company agreed to pay $913,932 to resolve False Claims Act allegations involving a physician’s hiring requests, allegedly unlawful laboratory referrals and Medicare claims. The government described a family friend hired, a promotion that made room for the physician’s stepdaughter, and a physician who then ordered significantly more tests. The hiring decisions and the laboratory’s federal bills belonged to the same story.

Guardant is a precision oncology company based in Palo Alto. The Justice Department announced the settlement on July 16, 2024, crediting the company for voluntarily disclosing the conduct and cooperating with the government.

The Hiring Recommendation That Became a Family Hire

The government alleged that an Austin, Texas physician first recommended a close friend of a family member for an Account Manager position in Guardant’s Oncology Division. That recommendation reached Human Resources around April 2021, and Guardant hired the friend.

The next request was for the physician’s own stepdaughter. In October 2021, he contacted the company seeking a position for her after graduation from college. Guardant considered her for a job in its Screening Division and rejected her.

Then, around February 2022, two Guardant employees arranged a promotion for the family friend. According to the government, that move created an opening in the Oncology Division for the stepdaughter. The employees allegedly knew both that she was related to the physician and that she was not qualified for the role.

That is the revealing personnel decision in the government’s account. A candidate rejected by one division gained an opening in another through someone else’s promotion. The government connected the hiring sequence to the physician’s orders: he ordered significantly more Guardant tests per quarter after both hires.

How the Referrals Became Medicare and TRICARE Claims

The United States alleged that Guardant submitted claims to Medicare and received payment for clinical laboratory services referred by the physician in violation of the Physician Self-Referral Law, commonly called the Stark Law. It also alleged that Guardant knowingly submitted, or caused others to submit, false claims for the physician’s tests to Medicare Part B and TRICARE.

Taxpayers paid the laboratory’s bills while the alleged arrangement tied the physician’s referrals to a job for his stepdaughter.

Alongside the larger False Claims Act settlement, Guardant agreed to pay $31,082 in an administrative settlement with the Defense Health Agency.

Why the Hiring Relationship Matters to a Laboratory

A laboratory earns testing revenue from orders that originate with clinicians. The physician’s choice of laboratory therefore connects clinical work in the practice to revenue at another business. In Guardant’s case, the government placed a hiring relationship beside a rise in that physician’s test orders. Human Resources and laboratory sales were parts of the same alleged referral problem.

The economics give those orders weight. In separate Medicare fee-schedule data for 2024, the Department of Health and Human Services’ Office of Inspector General reported a $4,900 median payment for Guardant360 CDx. That payment level for a named cancer test helps explain the commercial importance of the physician choosing where to send an order.

A Software Benefit Can Follow the Same Referral Logic

Bio-Reference Laboratories faced allegations that it donated the cost of electronic medical records software to physicians’ offices based on the volume of business they generated. That allegation was part of its September 2020 settlement. The benefit in that case was technology for the practice.

The government also alleged that Miraca Life Sciences provided electronic health record subsidies and free or discounted technology consulting to referring physicians. Its January 2019 settlement addressed those alleged inducements.

Guardant’s hiring account supplies a different place to look inside the business: personnel decisions. Software support benefits a practice. A job benefits the person hired. In each account, the government connected a benefit to the physician whose orders generated laboratory business. That connection is why a referral investigation can reach beyond the laboratory’s test results and invoices.

Guardant Disclosed the Conduct and Stopped Billing

The Justice Department credited Guardant for voluntarily disclosing the conduct to the inspector general, cooperating with the investigation and taking prompt and substantial remedial measures. Shortly after receiving information about the physician’s referrals, Guardant stopped billing federal health care programs for his tests. It also terminated the physician’s family member’s employment.

Those actions addressed both ends of the alleged arrangement: the employment relationship and the federal claims. For someone who saw the issue raised inside the company, the response is part of the story too: when the information arrived, what happened to billing, and what happened to the job.

Laboratory compliance scholarship puts personnel decisions inside that same field of view. The 1997 Laboratory Medicine article Model Plan Helps Laboratories Fight Fraud described the inspector general’s model that included investigating personnel problems and considering compliance when evaluating supervisors and managers. It also discussed retaining and analyzing test-use data.

What Evidence Is Needed to Prove Fraud?

For a laboratory referral case built around hiring, the evidence connects the employment decision, the physician’s orders and the claims those orders produced. Our whistleblower experts examine that connection with you. In this case, the government’s account points to specific events: the physician’s request to Human Resources, the rejected application, the promotion that opened a position and the increase in testing after the hires.

Hiring correspondence and promotion approvals can show who asked for a position, who made it available and what the decision-makers knew about the candidate. Referral and billing records can show how the physician’s orders changed and which federal programs received the claims. We work with insiders to establish those connections, including how the company responded when the relationship came to its attention.

You may know the hiring decision from Human Resources, the physician’s business from sales, or the claims from billing. The value of that knowledge is in connecting the decisions across the company. Our whistleblower experts work through those connections with you and assess the case they support.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw the Hiring Decision Behind the Orders

If you saw a physician’s hiring request turn into laboratory business, speak with our whistleblower experts about the hire behind the orders. We build your strongest laboratory referral whistleblower case with you, bring in healthcare fraud whistleblower lawyers who understand laboratory referral arrangements, and stay beside you through the pursuit of a recovery.