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SAN DIEGO — A San Diego-based medical diagnostic laboratory paid more than $4 million to resolve allegations that it violated the federal False Claims Act by paying improper kickbacks to physicians and physician groups in exchange for patient referrals, the U.S. Attorney’s Office announced Wednesday.

Pathway Genomics Corp. provides analysis of genetic testing kits for a variety of purposes within the field of clinical genomics, including tests that analyze the risk for certain genetic diseases and tests concerning the responsiveness of certain medications. The tests are performed on a patient’s saliva sample, typically collected by a physician and mailed to Pathway’s laboratory for analysis.

To ensure that health care providers remain motivated solely by their patients’ medical needs, the Anti-kickback Statute and False Claims Act prohibits offering, paying, soliciting or receiving money or items of value to induce referral of goods or services covered by federally funded health care programs.

The civil settlement resolves allegations that Pathway induced health care providers to refer Pathway genetic testing kits and services, and then received government reimbursement for those tests in violation of the law.

As alleged, Pathway offered physicians and medical groups reimbursements of up to $20 for each saliva kit they collected and submitted to Pathway for testing.

The government alleged that physicians received as much as $13,534 in reimbursements from Pathway and that most of the doctors had never ordered the costly genetic tests before enrolling in Pathway’s reimbursement program.

It was further alleged that, as its referrals increased, Pathway billed the high costs of the lab analyses to federal health care programs such as Medicare and TRICARE.

Pathway has since voluntarily discontinued its physician reimbursement program. Pathway’s Associate General Counsel Lesli Gallagher released this statement:

“Pathway Genomics has reached a settlement with the United States Department of Justice. Pathway admits no wrongdoing as part of the settlement and is neither an admission of liability or wrongdoing by the Company, nor a concession by the United States that its claims are not well founded.

Pathway has fully cooperated with the inquiry and was not required to enter into a corporate integrity agreement. We now consider this matter closed.  By resolving this issue we can stay focused on our growing business and avoid the time and expense of a potentially lengthy litigation process.

Although Pathway may debate some of the merits of the DOJ’s allegations, we recognize and respect the government’s responsibility to regulate industry practices.  We continue to offer our full array of advanced genetic tests that empowers physicians and patients with accurate and actionable information that allows them to live better and healthier lives.”