Indianapolis, Indiana – Patients Choice Laboratories (PCL), a diagnostic lab headquartered in Indianapolis, has agreed to pay $9.62 million to resolve allegations of violating the False Claims Act and the Anti-Kickback-Statute This Indiana Laboratory Fraud Settlement marks a significant legal resolution.

Federal prosecutors allege that PCL knowingly billed Medicare for respiratory pathogen panels (RPPs) that were either medically unnecessary or obtained through kickbacks, contributing to the Indiana Laboratory Fraud Settlement. The lab also paid commissions to independent sales representatives and marketing firms based on referral volume, a clear violation of federal law.

In November 2020, PCL entered into a Marketing Services Agreement with a company posing as an infection prevention provider. While the contract claimed to cover “marketing and management services,” investigators say it was a pretext for paying referral fees. The company swabbed long‑term care residents for COVID‑19, but PCL used the specimens to bill Medicare for unnecessary RPPs—sometimes without performing COVID‑19 tests at all.

Between December 2020 and May 2022, PCL paid the company $1.86 million for referrals, while billing Medicare for thousands of RPPs across 43 facilities nationwide as part of the Indiana Laboratory Fraud Settlement, receiving more than $6 million in reimbursements. PCL also contracted with 1099 representatives, paying them commissions totaling $372,000 for arranging additional referrals.

Federal officials condemned the scheme:

• “Kickback arrangements waste taxpayer dollars and undermine healthcare integrity,” said Tom Wheeler, U.S. Attorney for the Southern District of Indiana.
• “Providing impermissible compensation to induce referrals is unacceptable,” added Kelly O. Hayes, U.S. Attorney for the District of Maryland.
• HHS‑OIG and the FBI emphasized that false Medicare claims erode public trust and divert resources from legitimate patient care.

The case was jointly handled by the Civil Division’s Fraud Section, U.S. Attorneys in Indiana and Maryland, with investigative support from HHS‑OIG and the FBI.

This settlement underscores the government’s aggressive use of the False Claims Act to combat healthcare fraud. The Indiana Laboratory Fraud Settlement is a prime example of this effort. Officials encourage reporting suspected fraud to the Department of Health and Human Services at 800‑HHS‑TIPS.