CorePath and Oncology San Antonio: The Payment for Each Biopsy Referral

In the CorePath Oncology San Antonio settlement, the laboratory, oncology practice and participating physicians agreed to pay more than $4 million to resolve civil False Claims Act allegations, including kickbacks for biopsy referrals. The government described CorePath as providing the in-office bone marrow biopsy service and subsequent diagnostic testing. It alleged that money then went back to the referring physicians’ private practice entities for each biopsy. Someone inside the laboratory or practice would recognize both sides of that arrangement: the specimens coming in and the payments going out.

The Justice Department announced the settlements on April 2, 2024. CorePath Laboratories agreed to pay $2,746,275, while Oncology San Antonio and its physicians agreed to pay $1.3 million. The agreements were with the United States and Texas. The practice’s settlement also covered allegations of medically unnecessary care.

The Bone Marrow Biopsy and the Payment Back

The United States alleged that Oncology San Antonio and its physicians entered a biopsy-referral kickback arrangement with CorePath in August 2016. Its announcement described CorePath as a San Antonio diagnostic reference laboratory providing bone marrow biopsy services at the hematology and oncology practice’s locations, followed by diagnostic testing on those biopsies.

The alleged payment went to the private practice entities of three Oncology San Antonio physicians. Those entities matter: the practice where a patient received the service, the laboratory doing the work and the business receiving the referral payment occupied different places in the transaction.

The laboratory allegedly paid the referral source while also receiving the testing business. That is the transaction an insider can recognize in the agreement, the biopsy records and the payments to the physician entities.

Why the Payment for Each Referral Mattered

A payment attached to each referred biopsy puts a price on the decision to send that work to a particular laboratory. In this case, the government alleged that the payments were kickbacks under the Anti-Kickback Statute and that the written contract did not meet the law’s exceptions for permitted arrangements.

The alleged arrangement connected the physician’s choice of laboratory to money received by the physician’s own business. The patient’s need for diagnostic work and the physician’s financial return then sat inside the same referral decision. Patients need that decision made for their care, while taxpayers pay the bill.

The Justice Department explained that the Anti-Kickback Statute prohibits paying or receiving value to induce referrals for services covered by federal health care programs. Claims for services tied to those unlawful payments can become false claims for government money.

The neighboring blood-testing cases show how the payment’s label can change while its connection to referrals remains. In the Health Diagnostic Laboratory and Singulex settlement announcement, the government alleged that processing and handling fees induced physicians to send blood tests. CorePath’s allegation concerned payment for a biopsy referral, with the laboratory itself providing the in-office biopsy service and subsequent testing.

CorePath Provided the Biopsy and Testing

In CorePath’s case, the government identified both the in-office biopsy service and the subsequent diagnostic testing. An accounts-payable entry and a pathology report may describe different sides of the same relationship.

A Pathology Referral Can Buy More Than a Check

CorePath’s alleged per-biopsy cash payment contrasts with the software benefits for referring physicians alleged in Miraca Life Sciences‘ 2019 settlement.

The Separate Allegations About Unnecessary Care

The Oncology San Antonio settlement also resolved allegations that a physician, acting through Oncology San Antonio and her own practice entity, provided and billed for medically unnecessary tests, services and treatments. The Justice Department identified Medicare, TRICARE and Texas Medicaid beneficiaries in the San Antonio area.

Those allegations concerned the reason for the care itself. The referral-payment allegation concerned money exchanged for directing biopsy work to CorePath. The documents that answer them sit in different places.

CorePath and the physician facing the unnecessary-care allegations entered separate Integrity Agreements with the HHS Office of Inspector General: the agency’s register recorded the laboratory’s agreement, while the Justice Department identified an agreement covering the physician and her practice entity.

What a Laboratory Insider Can Connect

A referral-payment case becomes much clearer when the contract, the laboratory work and the payment records tell the same story. A laboratory employee may see the biopsy and testing records. A practice administrator may know how the physician entities invoiced or received payment. Someone responsible for the arrangement may know how the amount was tied to referrals.

The laboratory industry’s own compliance literature has long focused on records that can expose a repeated practice. Model Plan Helps Laboratories Fight Fraud, published in Laboratory Medicine in June 1997, described the HHS Office of Inspector General’s model laboratory compliance plan. Its recommendations included written policies, staff training, audits and record retention. The article also described tracking test use and monitoring standing orders for continued validity.

That gives an insider another place to look within the work they already know: what the company reviewed, what a review found and how it responded. A policy’s wording and the transactions carried out under it can tell very different stories.

A former physician employee brought the qui tam case resolved by the Oncology San Antonio settlement. The whistleblower had worked for the physician facing the unnecessary-care allegations. Clinical knowledge had a place in the case alongside the financial arrangement.

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

You Know Where the Biopsies and Payments Went

If you know how a laboratory paid for biopsy referrals or how a physician’s business received those payments, speak with our whistleblower experts. We build your strongest laboratory kickback whistleblower case with you, bring in laboratory fraud whistleblower lawyers who understand referral arrangements and pathology billing, and stay beside you through the case.