Labtech Diagnostics: The Paperwork Said Rent

In the Labtech Diagnostics settlement, the laboratory and its founder and CEO agreed to pay at least $6.8 million to resolve allegations of kickbacks for laboratory referrals. Labtech allegedly put a business label on payments for the next test order.

LTD Holding LLC is the former Labtech Diagnostics LLC. According to the settlement agreement, Labtech operated a clinical laboratory in Anderson, South Carolina. Its founder owned the business and served as chief executive officer. The Department of Justice announced the resolution on January 7, 2026.

The civil allegations concern claims to Medicare, Medicaid and TRICARE from September 1, 2016, through June 30, 2022. The government said Labtech paid to influence the doctors whose orders brought testing into the laboratory, then billed federal healthcare programs for that business.

Do Doctors Get Kickbacks for Ordering Tests?

The Labtech case alleged that doctors received kickbacks for ordering tests through payments and benefits disguised as business arrangements. Labtech’s settlement describes five forms: office space rental, phlebotomy payments, toxicology payments, an inflated used-equipment purchase and free screening services and supplies. Each allegedly bought the same thing: laboratory referrals.

The laboratory depends on a decision made in the referring practice. In Labtech’s case, the government alleged that money and benefits flowed back toward the people making that decision.

That is why the name on an invoice matters less than what the payment bought. The Justice Department explains that the Anti-Kickback Statute protects medical decisions from improper financial incentives, and that knowingly submitted claims arising from prohibited kickbacks can violate the False Claims Act. Patients rely on an independent testing decision. Taxpayers pay the resulting bill.

Rent, Phlebotomy and Toxicology Payments

The first three alleged disguises put referral payments under the names of services a laboratory might purchase from a physician’s office. From August 2018 through November 2021, the government alleged, Labtech and its founder paid doctors purported rent, phlebotomy fees and toxicology fees to induce orders for Labtech testing.

The concealment allegation is unusually concrete. The government said some payments arrived as hand-delivered money orders. Contracts described them as payment for office space or for phlebotomy or toxicology services. Certification forms allegedly misstated the square footage and hours that were supposed to support those descriptions.

Forms meant to guard against fraud allegedly helped disguise it.

A practice employee who knew the space and the work could therefore see something an invoice alone would hide. So could a laboratory employee who handled the contracts and payments. In this account, the certification process itself became part of the alleged disguise.

An Inflated Price for a Used Analyzer

The used-equipment allegation concerned a laboratory analyzer owned by Joint and Muscle Medical Care, a physician practice in Charlotte, North Carolina. The government alleged that in 2016 Labtech arranged to pay more than fair market value for it to secure the practice’s laboratory referrals.

The referral payment was allegedly embedded in the purchase price. For someone familiar with the transaction, the useful knowledge would be what the analyzer was worth and what Labtech expected from the selling practice.

Free Screens in Return for Confirmation Testing

Labtech allegedly supplied a Landis, North Carolina pain-management practice with free services and supplies for presumptive urine drug testing in return for referrals of definitive testing. The settlement agreement identifies the practice as Troyer Medical and dates the arrangement from March 2018 through November 2021.

The Justice Department described the confirmation testing referred to Labtech as lucrative. The alleged exchange joined an expense in the practice to revenue at the laboratory: Labtech supplied the screening side for free, and the practice sent the confirmation work back.

The distinction between those tests explains why that exchange mattered. The Journal of Family Practice’s 2021 review, Urine Drug Screening: A Guide to Monitoring Tx With Controlled Substances, describes immunoassay screening as quick, relatively easy to perform and comparatively inexpensive. It describes chromatography with mass spectrometry as a more specific method that provides confirmatory results, at greater cost and with a longer wait for results.

The review also identifies a financial incentive to use large, expensive panels, test too frequently or send positive tests for unnecessary confirmation. Its clinical comparison helps explain the business attraction of the Labtech arrangement: the free service supported the front end of testing, while the laboratory received the more expensive work afterward.

That exchange puts a practical question in front of anyone who worked with the arrangement: what was the practice expected to send back in return for what the laboratory supplied? That relationship connects the supplies in the office to the testing revenue elsewhere.

What Evidence Is Needed to Prove Fraud?

For the alleged Labtech arrangements, evidence connects the stated reason for a payment with the space, work or equipment behind it and the referrals it bought. The case gives us concrete places to make that comparison: the space-and-hours certifications, the hand-delivered money orders and the used-analyzer purchase.

A person who knows why a form was changed or what a payment was supposed to secure may hold the part of the story the billing record cannot explain. We build that account with the insider, connecting the payment arrangement to the laboratory claims.

The Provider and Marketer Settlements

The Labtech resolution followed separate civil settlements with people and businesses on the receiving and arranging sides of laboratory referrals. Those cases make the alleged payment chain easier to see: the laboratory, the marketer and the ordering practice each had a role.

In its April 29, 2024 announcement, the Justice Department reported a separate $1,373,400 settlement with a marketer, his company and three Charlotte physicians and their practices. It alleged that South Ventures and its marketer offered purported rent and phlebotomy payments on behalf of an Anderson laboratory. They also allegedly received commissions based on the volume or value of Medicare and TRICARE referrals they arranged or recommended.

That announcement included Joint and Muscle Medical Care’s side of the equipment transaction. The government alleged that the practice and its physician received kickbacks disguised as a used-equipment purchase price, rent and phlebotomy payments in return for ordering tests. The later Labtech agreement describes the laboratory’s alleged role in paying above market value for the analyzer.

A March 6, 2025 announcement reported another $1,913,808 in civil settlements involving providers and laboratory marketers. Eagle Medical Center and its physician allegedly received payments described as rent, phlebotomy and toxicology fees.

Curis Healthcare and its marketer allegedly received commissions based on the volume and value of Medicare and TRICARE referrals. Saeed Medical Group allegedly received cash from the marketer and company in return for ordering laboratory testing.

These cases show how a referral arrangement can appear as a service contract at the practice and a commission at the marketing company, with laboratory testing providing the revenue behind both.

The Civil Settlement and the Criminal Agreement

The civil settlement includes a possible additional payment of up to $3,271,536, tied to money from Labtech’s sale of assets to Quest Diagnostics Clinical Laboratories. The agreement makes that payment contingent on Labtech or its founder receiving money still held by Quest from the sale. That is why the announced civil amount was a floor.

In the separate criminal matter, the Justice Department’s announcement says Labtech agreed to plead guilty to five counts of offering and paying health care kickbacks.

By the time it announced the Labtech settlement, the Justice Department reported over $11.5 million in civil False Claims Act settlements relating to Labtech, including recoveries from nine doctors. The related provider settlements reached South Carolina, North Carolina, Texas and Illinois.

The Whistleblower’s Share

A whistleblower’s qui tam case brought the allegations that the Labtech civil settlement resolved. The Justice Department announced a $1.36 million whistleblower reward, and the agreement assigns the whistleblower 20% of each settlement payment the government receives.

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

You Know What the Payment Bought

If you handled Labtech-style rent certifications, equipment purchases or free screening arrangements, tell our whistleblower experts what the practice was expected to send back. We build your case around that knowledge, bring in laboratory fraud whistleblower lawyers who understand referral payments, and stay beside you through the pursuit of a recovery.