Bala Cynwyd Physician BioTek Settlement: Free Practice Support, Referrals in Return

In the Bala Cynwyd physician BioTek settlement, a neurologist paid $480,000 to resolve allegations that he accepted gifts, dinners and free administrative and clinical support in exchange for patient referrals. The alleged benefit reached into the work of running the practice: dealing with insurers, getting infusion claims paid and directing patients to the pharmacy supplying the help.

BioTek reMEDys, a specialty pharmacy in New Castle, Delaware, offered drugs and infusion services. The Justice Department’s October 2, 2023 announcement said the physician operated a neurology practice in Bala Cynwyd, Pennsylvania, and allegedly solicited and accepted the benefits for numerous referrals. Two former BioTek employees brought the False Claims Act whistleblower case behind the resolution.

Free Practice Support That Helped Get Claims Paid

The former employees’ complaint alleged that BioTek supplied free administrative, clinical and insurance support to referring practices to help get claims for its specialty drugs paid. That is the business value of free work tied to referrals: the practice receives useful labor, and the supplier seeks the prescribing business.

The complaint gives a specific example involving the neurologist’s office:

We see something more pointed here than a free dinner. The pharmacy’s marketing function allegedly stepped into the practice’s role in an insurance discussion intended to get the pharmacy’s claims paid. The person arranging that discussion or handling the insurer’s response could know whose work the practice’s name was being used to describe.

The alleged insurance support also explains why the practice and pharmacy accounts belong together. A referral sent business to BioTek, while work supplied by BioTek helped move its infusion claims toward payment. An insider who knew only the office side could still explain a critical part of that exchange.

Referrals Flagged for Waived Patient Bills

The complaint alleged that a special alert in BioTek’s CPR+ system flagged referrals from selected physicians, including the neurologist, and reminded employees not to invoice those patients for cost-sharing amounts. That copay-waiver arrangement appeared in the same system employees used to handle patient balances. The referring physician’s identity changed what happened to the patient’s bill.

The Justice Department alleged that, from at least August 2015 through May 2020, BioTek routinely waived Medicare and TRICARE patients’ copayments to induce them to buy its drugs and services. Many of the specialty drugs carried large copays, which the government said BioTek waived without regard to financial hardship. That connected the patient-side benefit to the pharmacy’s revenue from federally funded health care.

The complaint alleged that the paperwork followed the referral relationship. Employees were told to send financial-hardship forms directly to the commissioned chief marketing officer, who approved waivers without discussing or analyzing patients’ finances. In one exchange involving the neurologist’s patient, the complaint alleged:

The allegation puts the decision ahead of the paperwork. Patient unknown, assistance approved. The employee who handled the form could explain more than the completed form showed.

A Separate Payment by the Referring Physician

The Justice Department said the neurologist had paid his settlement based on his ability to pay. BioTek and its chief executive separately agreed collectively to pay $20 million, also based on ability to pay. The physician’s payment resolved the allegations about accepting the benefits, while the company resolution addressed the alleged provision of inducements to patients and physicians.

The announcement also separated the former employees’ rewards from the different settlements. It said they would receive $4 million from the company and chief executive’s resolution and a separate share from the physician’s settlement.

The announcement credits a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the District of Delaware. It also credits the Department of Health and Human Services Office of the Inspector General, the Office of Inspector General for the Office of Personnel Management and the Defense Criminal Investigative Service.

What Are Kickbacks in Health Care?

Kickbacks in health care can take the form of useful services supplied in exchange for referrals. In this case, the government alleged that gifts, dinners and free practice support bought referrals to a specialty pharmacy.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud describes free or below-market services as noncash compensation for referrals. That explains why physician kickbacks can be found in the work supplied to an office.

The Records an Insider Can Explain

The strongest connection runs from the benefit to the referral and then to the claim for government money. The same forensic-accounting paper puts the claim at the center of the False Claims Act inquiry:

For this arrangement, we would examine the insurer discussion alongside the referral and the infusion claim it was meant to get paid. The practice name in an insurance note matters, but so does the person who actually spoke for it. Someone who scheduled the discussion or worked with the marketing officer may be able to explain that difference.

We would also compare the CPR+ referral alert with the patient balance, the hardship form and the instruction approving the waiver. Those records speak to different decisions: who referred the patient, who stopped the invoice and who approved the assistance. The alleged promise of a physician’s signature connects the office to the pharmacy’s handling of the balance.

That is the value of an insider’s knowledge of the records. A completed form shows the decision on paper. The employee who heard the instruction can explain how the decision was made and whose business it served.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Here, former pharmacy employees brought the case that reached both the supplier and a referring physician. Their position inside the business gave them a view of the support, patient balances and instructions described in their complaint.

You Know Who Did the Work

If you handled the insurer calls, referral alerts or patient balances, talk with our whistleblower experts about the arrangement inside the practice. We work with you to build your strongest kickback whistleblower case from that firsthand knowledge and bring in healthcare fraud whistleblower lawyers who understand physician referral arrangements. We stay beside you as your account of the office’s work becomes the foundation for pursuing the case.