Atlanta Gastroenterology Associates Agrees to Pay 4.75M Dollar Settlement in Georgia Over Alleged Kickback Scheme and Unnecessary Medical Testing

A major medical provider in Georgia is paying millions to resolve federal fraud allegations, US Justice Department announced.

Atlanta Gastroenterology Associates has agreed to hand over $4.75 million to settle claims that it violated the False Claims Act.

Federal authorities alleged the practice received improper financial benefits in exchange for steering lab work to a specific pathology company and billed government health programs for certain services that were not medically necessary.

The settlement resolves the allegations, and there has been no determination of liability.

The Lab Partnership Under Scrutiny

According to the government, the arrangement dates back to around May 2017, when Atlanta Gastroenterology Associates entered into a deal with Advanced Pathology Solutions, a laboratory based in Little Rock, Arkansas.

Under the agreement, APS helped set up and operate a limited-capacity pathology lab inside the gastroenterology group’s Atlanta office. Technicians prepared and stained specimen slides on site.

The practice then billed Medicare and other insurers for the technical portion of the testing, while APS handled the interpretation and billed for the professional component.

Prosecutors alleged that in exchange for various financial and operational benefits tied to building and running the in-house lab, the practice agreed to refer patients exclusively to APS.

The government contended those benefits amounted to unlawful kickbacks for patient referrals.

Allegations of Unnecessary Testing

The settlement also addresses claims that the practice routinely ordered “special stains” on biopsy samples using a blanket or reflex process.

Instead of waiting for a pathologist to review an initial routine stain and determine if additional testing was medically justified, the special stains were allegedly ordered automatically.

Federal officials said that approach led to billing for services that were not medically reasonable or necessary and were not properly documented in patient records.

The business relationship between Atlanta Gastroenterology Associates and APS ended around May 2020.

Federal Agencies Emphasize Accountability

The investigation was led by the Justice Department’s Civil Division, Commercial Litigation Branch, and Fraud Section, along with the U.S. Attorney’s Office for the Eastern District of Arkansas.

Multiple oversight bodies assisted, including the U.S. Department of Health and Human Services Office of Inspector General, the Department of Defense Office of Inspector General, and the Department of Veterans Affairs Office of Inspector General.

Assistant Attorney General Brett A. Shumate said the resolution underscores the government’s focus on protecting taxpayer dollars and ensuring that services billed to federal programs are legitimate and free from improper influence.

U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas noted that healthcare fraud continues to burden taxpayers nationwide and vowed continued enforcement efforts.

Why the False Claims Act Matters

The False Claims Act is one of the federal government’s most powerful tools for combating healthcare fraud. It allows authorities to recover funds paid out improperly through government programs such as Medicare and Medicaid.

Officials say tips from whistleblowers and members of the public often play a crucial role in uncovering fraud schemes. Complaints about potential healthcare fraud can be reported to federal authorities through designated hotlines.

Impact and Consequences

The $4.75 million payout is significant, but the ripple effects go further.

• Financial consequences: The practice must absorb the settlement cost, which may impact operations and oversight practices moving forward.
• Regulatory scrutiny: Healthcare providers nationwide may face heightened compliance reviews involving referral relationships and billing practices.
• Public trust concerns: Allegations of unnecessary testing and kickbacks can erode patient confidence in medical decision-making.
• Industry warning: The case serves as a reminder that referral arrangements must comply strictly with federal anti-kickback and fraud laws.

Even though the settlement does not constitute an admission of liability, it signals the seriousness of the government’s claims.

What’s Next?

With the settlement finalized, the case is resolved from a civil enforcement standpoint.

However, healthcare providers across the country are likely reviewing their own laboratory partnerships and billing procedures to ensure compliance.

Federal authorities have indicated they will continue prioritizing healthcare fraud investigations, particularly where alleged kickbacks or medically unnecessary services are involved.

Summary

Atlanta Gastroenterology Associates will pay $4.75 million to settle federal allegations that it received unlawful kickbacks tied to pathology referrals and billed for unnecessary medical testing.

The government claimed the arrangement with Advanced Pathology Solutions involved improper financial benefits and automatic ordering of special stains without sufficient medical justification.

While the settlement resolves the claims without a finding of liability, officials say the case reinforces their commitment to protecting federal healthcare funds.

Bulleted Takeaways

• Atlanta Gastroenterology Associates agreed to pay $4.75 million to settle False Claims Act allegations.
• The government alleged the practice received unlawful benefits in exchange for referring pathology work to Advanced Pathology Solutions.
• Authorities also claimed the practice billed for medically unnecessary special stains ordered automatically.
• The partnership between the two entities ended in May 2020.
• Multiple federal agencies participated in the investigation.
• The settlement resolves allegations only and does not include a determination of liability.