In March 2021, the Department of Justice (“DOJ”) filed a civil suit against Dr. Clay Cockerell alleging that he knowingly permitted a laboratory management company to submit false claims to federal health insurance programs for unnecessary tests. (LINK to DOJ Press Release on Doctor Accused of False Claims Violations). The DOJ alleges that in return for Dr. Cockerell’s agreement with the company to submit false testing claims on his practice’s behalf, the company agreed to pay Dr. Cockerell’s practice 20% of the net revenue from those tests. (LINK to Most Recent Court Opinion on the Matter). According to the DOJ, Dr. Cockerell tried to avoid breaking Anti-Kickback and False Claims laws by specifying that his practice would not provide any testing services to beneficiaries of federal health insurance programs or collect any federal revenue. However, Dr. Cockerell quickly became aware the lab management company was breaking that agreement, and he sent a letter warning the company they were in violation of the False Claims Act.
Despite that letter, Dr. Cockerell continued to permit the company to use his practice’s lab license to submit fraudulent claims to federal healthcare programs. Patient complaints about the fraudulent practices and a CBS News Story highlighting the same led to the DOJ’s suit against Cockerell- a prime example of the important role the individual has in False Claims Act suits. The matter is still ongoing, but it is clear that a defendant cannot hide behind a third-party management company whom he knew was likely defrauding federal programs.