Atlanta Gastroenterology Associates: Referral Kickbacks and Default Pathology Workups

The Atlanta Gastroenterology Associates settlement required the practice to pay $4.75 million to resolve allegations of pathology referral kickbacks and unnecessary special-stain testing. The government described an arrangement that let the practice earn money preparing biopsy slides while sending the interpretation work exclusively to an outside laboratory. It also alleged that the practice automatically added special stains before a pathologist decided whether the patient needed them.

The Justice Department announced the resolution on February 27, 2026. Atlanta Gastroenterology Associates is a gastroenterology physician practice headquartered in Atlanta with more than 60 locations throughout Georgia. The government’s account centers on its arrangement with Advanced Pathology Solutions, a pathology laboratory in Arkansas.

The In-Office Pathology Arrangement

The government described a billing arrangement in which the practice earned money preparing slides and Advanced Pathology Solutions earned money interpreting them. Anatomic pathology allows the technical work and the physician’s interpretation to be billed separately.

In the settlement agreement, the government alleged that the arrangement began on or about May 15, 2017. Advanced Pathology Solutions helped develop, construct and equip a limited-capacity pathology laboratory inside the practice’s office, which the laboratory called a lean lab. In that account, the laboratory trained histology technicians to prepare and stain patients’ biopsy slides under the supervision of its medical-director pathologist.

According to the government’s account, Atlanta Gastroenterology Associates billed the patient’s insurer for that preparation, the technical component. The practice then mailed the prepared slides from Georgia to Arkansas, where an Advanced Pathology Solutions pathologist reviewed and interpreted them. The laboratory billed the professional component.

The government identified claims to Medicare, TRICARE and the Department of Veterans Affairs. The agreement names CPT codes 88305, 88312 and 88313, with a technical-component modifier on the practice’s claims and a professional-component modifier on the laboratory’s claims.

Do Doctors Get Kickbacks for Ordering Tests?

The government alleged that Atlanta Gastroenterology Associates received benefits in exchange for exclusive pathology referrals. Those alleged benefits included services, equipment and operating support that helped the practice run its own laboratory and bill for the technical work.

The government alleged that Advanced Pathology Solutions provided below-market supervision, operational support and medical-director services, along with free supplies unrelated to handling specimens for the laboratory. The agreement also lists the laboratory buildout, information systems, tablets, barcode scanners and label printers among the alleged benefits. The package included specimen storage, laboratory supplies and shipping.

The government alleged that the practice did not pay fair-market value for these additional benefits. Under the arrangement it described, the contract required the practice to send Advanced Pathology Solutions the professional-component work for stains created in the in-office lab, including work for patients covered by federal health care programs.

A Marketing Salary Tied to Pathology Referrals

The alleged inducement also reached a physician owner’s family. The government said that, approximately a month before the laboratory agreement, Advanced Pathology Solutions offered to hire the daughter of a physician owner and officer of the practice. According to that allegation, she became a fully remote marketing manager at a salary of $180,000 a year, and the laboratory indicated that her salary was tied to the volume of pathology referrals the practice would send.

The alleged salary tie put a physician owner’s family income on the same side of the bargain as the laboratory’s referral volume.

Why the Special Stains Matter

The special-stain allegation concerned when the additional testing was ordered and what justified it for the patient. The government alleged that Atlanta Gastroenterology Associates performed and billed for special stains automatically, before a pathologist reviewed the routine stain, without a patient-specific justification in the medical record.

The agreement describes the ordinary sequence. A pathologist reviews the routine H&E stain and may decide that more information is needed to confirm or rule out a diagnosis. That review can lead to an additional special stain. In the government’s account of the practice’s workflow, however, the biopsy site selected the extra test before that review happened.

The government alleged that Advanced Pathology Solutions pathologists overseeing the in-office lab implemented the protocol, including automatic preparation of an Alcian Blue special stain for every esophageal specimen in addition to the routine stain. The agreement alleges that these automatic orders increased both the volume of procedures and the corresponding revenue for the practice and the laboratory.

The distinction is familiar to people who work with reflex testing: what triggers the extra test? A physician’s conditional order can tie an additional test to the result of an initial one. Here, the government described a protocol triggered by where the biopsy came from. The allegation turns on that missing patient-specific review, and on the additional services billed as a result.

The referral allegation concerns what the practice received for directing work to the laboratory. The unnecessary-testing allegation concerns why the extra stains were performed at all. The government’s healthcare fraud allegations reached both parts of the arrangement.

The Practice Raised Concerns About Its Own Stain Use

The government alleged that Atlanta Gastroenterology Associates met with Advanced Pathology Solutions in approximately mid-2019 about concerns that its special-stain services were not medically reasonable or necessary. The practice allegedly supplied data showing it had been ordering certain special stains over 100 times more often than other gastroenterology practices. The practice’s own numbers pointed to the special stains the government alleged were unnecessary and billed to Medicare, TRICARE and veterans’ health care. Taxpayers were paying for those services.

The agreement also describes a conflict between the protocol and the local Medicare coverage policy, which called for review of the routine stain before special stains were ordered.

The 1997 Laboratory Medicine article Model Plan Helps Laboratories Fight Fraud described the Office of Inspector General’s recommendation that laboratories retain and analyze utilization data by billing code. The practice’s comparison with its peers illustrates how that kind of analysis can bring unusual testing patterns into view.

What the Settlement Covered

The civil agreement covered gastrointestinal pathology claims from May 15, 2017, through May 28, 2020. The government alleged both improper referral benefits and unnecessary special-stain services. The agreement says Atlanta Gastroenterology Associates ended its relationship with Advanced Pathology Solutions on the latter date.

The agreement designated $2,375,000 of the settlement as restitution. It also required the practice to forgo seeking payment for the covered billings from patients or third-party payers.

The laboratory later reached its own resolution: the Justice Department announced a separate $30 million settlement with Advanced Pathology Solutions on June 17, 2026, over kickbacks and unnecessary testing.

What an Insider Would Recognize

The medical record adds the patient’s side of the story. The government specifically alleged that the additional stains lacked justification there. Industry payment guidance also recognizes that documentation of a physician’s intent can sit in the patient’s chart rather than the laboratory’s order file.

The same clinical pressure point appeared in Piedmont Pathology, where a pathologist brought a whistleblower case alleging that routine stains should be reviewed before special stains were ordered.

The noncash-benefit allegation has a separate parallel in Miraca Life Sciences. The government alleged that it provided referring physicians with electronic-health-record subsidies and free or discounted technology consulting. In both accounts, services and technology supplied to the referring practice were part of the alleged referral incentive.

Whistleblower Cases About Pathology Referrals

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For a pathology referral qui tam case, our work starts with the connection you can explain between the operating arrangement and the services billed.

You Know How the Slides Became Claims

If you saw an automatic-stain protocol, a referral condition or benefits offered to win the interpretation work, speak to one of our whistleblower experts about how the stains were billed. We help you build your strongest pathology whistleblower case from what happened inside the practice, bring in laboratory fraud whistleblower lawyers with the right pathology experience, and stay beside you throughout the case.