Tampa Republic

Orlando, FL – United States Attorney Roger B. Handberg announced today that Vista Clinical Diagnostics, LLC; Access Dermpath, Inc.; and Advanced Clinical Laboratories, Inc. have agreed to pay the United States, the State of Florida, the State of North Carolina, and the Commonwealth of Virginia $2.45 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Medicaid containing manipulated diagnosis codes.

According to the settlement agreement, Vista Clinical Diagnostics, along with Access Dermpath and Advanced Clinical Laboratories, billed Medicare and Medicaid for clinical laboratory services using diagnosis codes generated by a macro and inserted into beneficiaries’ reimbursement submissions. This allegedly occurred from January 1, 2017, through December 31, 2021. The allegations state these diagnosis codes were generated by the defendants and not provided by the beneficiaries’ physicians.

"My office is committed to investigating and federally prosecuting providers who submit false claims and attempt to cheat the system," said U.S. Attorney Roger Handberg. "This case exemplifies our dedication to protecting our nation’s taxpayers from fraud."

"Health care providers who receive Medicaid funds must be responsible stewards of taxpayers’ money," said North Carolina Attorney General Josh Stein. "When they defraud North Carolinians, we will hold them accountable."

"Medical providers who participate in federal health care programs must follow the law when billing federally funded health care programs such as Medicare and Medicaid," said Special Agent in Charge Stephen Mahmood of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). "This settlement illustrates HHS-OIG’s commitment to protecting the integrity of these taxpayer-funded programs and the people they serve."

The settlement concludes a lawsuit originally filed in the United States District Court for the Middle District of Florida by Relator Balbina Castillo, a former employee of Vista Clinical Diagnostics, under the qui tam provisions of the False Claims Act. These provisions allow private citizens to sue on behalf of the United States for false claims and share in any recovery. Castillo will receive over $440,000 from this settlement.

The settlement agreement required approval from the United States Bankruptcy Court for the Middle District of Florida after Vista Clinical Diagnostics filed for Chapter 11 bankruptcy on October 2, 2023 (Case No. 6:23-bk-04109). The Bankruptcy Court approved both the Settlement Agreement and Vista Clinical Diagnostic’s bankruptcy plan on July 9, 2024.

Concurrently with this settlement, Vista Clinical Diagnostics, Access Dermpath, and Advanced Clinical Laboratories have entered into a five-year Corporate Integrity Agreement with HHS-OIG. This agreement mandates that these labs establish a compliance program meeting specific requirements and submit their Medicare claims for review by an Independent Review Organization.

This resolution resulted from coordinated efforts by multiple entities including: U.S. Attorney’s Office for the Middle District of Florida; Florida Office of Attorney General Medicaid Fraud Control Unit (MFCU); North Carolina Office of Attorney General MFCU; Virginia Office of Attorney General MFCU; and HHS-OIG. Assistant United States Attorneys Jeremy R. Bloor and Christopher Emden led this investigation alongside other senior attorneys from respective state offices.

The government emphasized its ongoing efforts to combat health care fraud using tools like the False Claims Act. Tips about potential fraud can be reported to HHS at 800-HHS-TIPS (800-447-8477).

The False Claims Act case is captioned United States ex rel. Castillo v. Vista Clinical Diagnostics, LLC et al., Case No. 6:20-cv-617-ORL-WWB. The settlement resolves claims made by various states in this case but does not determine liability.