Paradigm Diagnostics Agreed to Pay $3.4 Million for Allegedly Violating the Civil Monetary Penalties Law by Billing for Services Not Provided as Claimed and Paying Improper Remuneration

After it self-disclosed conduct to OIG, Paradigm Diagnostics, Inc. (Paradigm), Arizona, agreed to pay $3,432,729 for allegedly violating the Civil Monetary Penalties Law. OIG alleged that Paradigm presented claims to Medicare for services that were not provided as claimed. Specifically, OIG alleged that Paradigm submitted false claims to Medicare: (1) that included consult and surgical pathology services that were not provided; (2) for genetic testing using “stacked” codes; (3) for breast cancer testing that was not provided as claimed, because Paradigm submitted claims for the testing under the code for full gene sequencing, when Paradigm was only conducting partial gene sequencing; and (4) for genetic testing within 14 days after an inpatient or outpatient hospital discharge. OIG further alleged that Paradigm offered or paid remuneration to certain individuals and entities, and solicited or received remuneration from certain individuals and entities. Specifically, OIG alleged that Paradigm: (1) waived copayments that should have been paid by Medicare beneficiaries; (2) was offered $15,000 per referral by a pharmaceutical manufacturer for Paradigm’s referral of individuals for a clinical trial; (3) paid remuneration to 17 physicians in the form of meals and refreshments; and (4) paid remuneration to physicians in the form of compensation (e.g., registry payments) to 17 individual physicians and physician-affiliated entities.

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