Metric Lab Services LLC and Metric Management Services LLC (collectively, Metric) and Spectrum Diagnostic Labs LLC (Spectrum) and two of their owners and operators, Sherman Kennerson and Jeffrey Madison, have agreed to pay $5.7 million to resolve allegations that they caused the submission of false claims to Medicare by paying kickbacks in return for genetic testing samples.

Metric and Spectrum were clinical laboratories in Mississippi and Texas, which Kennerson and Madison co-owned and operated along with other individuals. The United States alleged that Metric, Spectrum, Kennerson and Madison participated in a genetic testing fraud scheme with various marketers. These marketers solicited genetic testing samples from Medicare beneficiaries. The marketers arranged to have a physician fraudulently attest that the genetic testing was medically necessary, and Metric and Spectrum would process the tests, receive reimbursement from Medicare and pay a portion of that reimbursement to the marketers.

In an attempt to conceal the nature of the kickback arrangement, Metric and Spectrum entered into sham agreements with marketers to provide various consulting, marketing and other services at an hourly rate. In reality, however, Metric and Spectrum paid the marketers a percentage of revenue, including Medicare reimbursement, in return for the samples. The marketers then generated sham invoices for hourly services that matched the agreed-upon kickback amount.

Kennerson and Madison have previously each pled guilty to one count of conspiracy to defraud the United States in connection with this scheme and are awaiting sentencing. United States v. Kennerson, No. 20-cr-00448 (BRM) and United States v. Madison, No. 20-cr-00449 (BRM) (D.N.J.).

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG.

The claims resolved by the settlement are allegations only and there has been no determination of liability except to the extent admitted by Kennerson and Madison in their criminal pleas.   back...