By Debbie Burke
Did you ever think pee could lead to riches? Me neither.
However, the owners of Northwest Physicians Laboratory (NWPL) of Bellevue, OR, figured out a way that earned them millions of dollars before the feds caught them.
In April, 2022, Richard Reid, 53, of Astoria, OR, was convicted of five federal felonies resulting from his and his co-conspirators’ scheme to receive illegal kickbacks for lab tests on urine specimens.
According to U.S. Attorney Nick Brown, NWPL officers and Reid knew:
“…it was illegal to profit on tests conducted by his toxicology lab that were paid for by government insurance. The web of referrals and kick-backs increased profits for Reid and his co-conspirators, while inflating medical costs for the rest of us. This is essentially theft from taxpayers.”
The Anti-Kickback Statute prohibits physician-owned labs from profiting for services billed to Medicare, Medicaid, and TRICARE. A statement from the Department of Justice says:
“Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.”
How did NWPL’s scheme work?
Reid, VP of Sales, and his cohorts steered urine tests to other labs, resulting in payments from Medicare, Medicaid, and TRICARE of more than $6.5 million. Those labs then turned around and shared the ill-gotten gains with NWPL by paying them more than $3.7 million disguised as “marketing services.”
The scheme lasted from 2013 to 2015 until investigators uncovered it. In February, 2021, NWPL pled guilty and was sentenced to pay more than $8 million in restitution. The lab is now out of business.
NWPL’s CEO Jae Lee and Executive Director Kevin Puls pled guilty, along with Steve Verschoor, the head of a lab that paid kickbacks. In July, 2022, the co-conspirators will be sentenced and face up to five years in prison for each count.
Pee for profit sounded like a good idea at the time. After conviction, though, I suspect the conspirators might say, “Aw, p*iss on it!”
TKZers: Any thoughts on this scheme? Bad jokes welcome.
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