South Carolina laboratory LTD Holding LLC and its CEO have agreed to pay at least $6.8 million to resolve allegations of kickbacks to doctors in violation of the False Claims Act, federal officials announced this week.
The company, formerly known as Labtech Diagnostics LLC, based in Anderson, South Carolina, and its founder Joseph Labash, who currently resides in the United Arab Emirates, reached the settlement following accusations they paid illegal kickbacks to physicians in exchange for patient referrals.
As part of the settlement, Labtech also pleaded guilty to five criminal counts of offering and paying healthcare kickbacks in violation of the Anti-Kickback Statute. The company will pay an additional $103,551.90 in restitution as part of its criminal plea agreement, the Department of Justice stated.
Broader Investigation Yields Larger Recovery
The case against Labtech appears to be just the tip of the iceberg. Federal authorities have now secured over $11.5 million in total civil False Claims Act settlements related to the laboratory’s practices, including recoveries from nine doctors who allegedly participated in the kickback scheme.
Kickbacks in healthcare remain a persistent problem despite years of enforcement efforts. Why? The financial incentives can be substantial, with laboratories competing fiercely for referrals that can generate significant revenue streams.
“This case demonstrates our commitment to holding laboratories accountable when they attempt to gain business advantages through illegal kickbacks,” said a Justice Department spokesperson familiar with the case. “These practices not only violate federal law but also undermine patient trust in our healthcare system.”
The Anti-Kickback Statute specifically prohibits offering or paying anything of value to induce the referral of services covered by federal healthcare programs. Such arrangements can influence medical decision-making and drive up healthcare costs while potentially compromising patient care.
The settlement doesn’t include any admission of liability by LTD Holding or Labash beyond the criminal plea, though the financial penalties are substantial for a regional laboratory operation.
Federal investigators haven’t disclosed whether individual executives beyond Labash might face separate charges, but the case underscores the government’s continued focus on laboratory billing practices and physician relationships in an industry where the lines between proper business development and illegal inducements sometimes blur.
