A Dallas-based clinical laboratory, Magnolia Diagnostics, and its investors will pay $24 million to resolve allegations that they performed unnecessary tests on seniors who received COVID-19 tests.
Allegations and Investigation
The federal government accused the lab’s owners, John Bains and Kelly Bains, of developing a scheme to require respiratory pathogen panels while performing community testing for COVID-19 in senior living communities. Investigators said Magnolia used prepopulated forms to obtain provider signatures to perform the tests.
Later, they said Magnolia continued to perform the tests without orders and after providers and communities requested COVID-19-only testing, while questioning the necessity or clinical value of the tests. Federal investigators also claimed that Magnolia froze and stored thousands of respiratory specimens, sometimes for weeks or months, before thawing them and testing them at a time when they could no longer be used to inform timely treatment, isolation, or infection-control decisions.
Resolution and Payment
Magnolia Diagnostics and its owners will pay $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for unnecessary respiratory tests performed on seniors who were getting COVID-19 tests. Investors in the laboratory agreed to pay $4.8 million to resolve common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act.
Original reporting: Dallas – Ft. Worth Feed (HLL/CB) — read the source article.
