Lab owner pleads guilty to $73 million Medicare kickback scheme

A laboratory owner admitted to paying kickbacks to a telemedicine company to have doctors approve medically unnecessary genetic testing in a $73 million effort to defraud Medicare, the Justice Department said Wednesday.

Exploiting temporary telehealth restriction amendments, the scheme took advantage of policy changes and waivers enacted during the COVID-19 pandemic to ensure Medicare beneficiaries could more easily access digital care.

Leonel Palatnik, co-owner of Panda Conservation Group, on Tuesday pleaded guilty, admitting that he and other co-owners paid kickbacks to Michael Stein, the owner of 1523 Holdings, to arrange for telemedicine providers to authorize genetic testing orders for Palatnik’s laboratories, according to the plea agreement.

Stein and Panda Conservation Group owners hid the objective of these payments under a fraudulent contract for “purported consultation and IT services.”

After 1523 Holdings offered telehealth providers access to Medicare beneficiaries they could bill for consultations, the providers agreed to refer beneficiaries to Panda Conservation Group’s laboratories for expensive and medically unnecessary cancer and cardiovascular genetic testing.

Palatnik pleaded guilty to one count of conspiracy to offer kickbacks and one count of paying a kickback, both felonies, and faces up to a maximum penalty of 15 years in prison.

His sentencing hearing is scheduled for November 9 in the U.S. District Court for the Southern District of Florida.

The lawsuit was filed as part of a larger effort to address illegal healthcare program activity during the pandemic. DOJ established the COVID-19 fraud enforcement task force in May to use department resources and agency partnerships to prevent and combat fraud, and they charged 14 defendants in seven areas in August.

Palatnik’s attorneys did not respond to requests for comment by deadline.


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