The Department of Justice (“DOJ”) announced a settlement with Sterling Healthcare Opco, LLC d/b/a Cordant Health Solutions (“Cordant”) to resolve a civil suit alleging Cordant illegally paid kickbacks to generate urine testing business from government insured consumers.  As part of the settlement, Cordant has agreed to pay various government healthcare programs nearly $12 million.

According to the settlement, Cordant, a Denver-based toxicology testing firm with a facility in Tacoma, Washington, funneled illegal kickbacks to Northwest Physicians Laboratories (“NPL”).  NPL treats patients for pain management and often needs urine tests to monitor patients’ use of opioids and other drugs.  Federal law, however, prohibits physicians from using their own testing labs for their Medicare and other federally insured patients.  Accordingly, NPL needed to contract its testing work to other labs.  That is where Cordant stepped in.  According to DOJ, Cordant paid NPL a large monthly fee to run NPL’s tests in Cordant’s labs, and then Cordant billed the federal government for those services.  In total, Cordant is alleged to have paid about $3.4 million in illegal kickbacks to NPL.

The investigation into Cordant arose from a whistleblower who filed a qui tam suit in 2015 regarding Cordant’s conduct.  Twenty percent of the settlement paid by Cordant will go to the whistleblower.

Read the DOJ press release here.