On September 26, 2023, the law firms of Wilbanks & Gouinlock, LLP and Peak Wooten McDaniel & Colwell, LLP, achieved a significant $13,750,000.00 settlement on the eve of trial in a hotly contested False Claims Act/Anti-Kickback Statute case.  The case was brought by a whistleblower (called a “relator”) named Dr. Niles Rosen, a retired pathologist.  Most of the settlement will be paid to the United States Treasury to reimburse American taxpayers, with Dr. Rosen receiving percentage of the recovery as provided by the False Claims Act.

Dr. Rosen was represented by Marlan Wilbanks, Susan Gouinlock, and Elaine Stromgren of Wilbanks & Gouinlock LLP (“W&G”) and Brandon Peak and Joseph Colwell of Peak Wooten McDaniel & Colwell LLP (“PWMC”), all of whom are lawyers experienced in handling False Claims Act cases.  The case was proceeding before the Honorable Mary S. Scriven of the United States District Court for the Middle District of Florida, Tampa Division.   

The Defendants in the case were Exact Sciences Corporation and Exact Sciences Laboratories, LLC (“Exact Sciences”).  Exact Sciences is a laboratory company that manufactures, markets, and sells a colon cancer screening test called “Cologuard” throughout the United States.  Cologuard is an at-home screening test that Exact Sciences claims can detect signs of colon cancer in a person’s stool.

Dr. Rosen filed this case on behalf of the United States Government alleging that over the course of several years, Exact Sciences offered Medicare, Medicare Advantage, andbeneficiaries kickbacks in the form of pre-paid Visa gift cards to induce those beneficiaries to return Cologuard kits to Exact Sciences for testing and billing to government health insurance programs.  Dr. Rosen alleged that these offers and payments were prohibited by the federal Anti-kickback Statute, 42 U.S.C. § 1320a-7b, and that the payments the federal government made for such tests were false and fraudulent claims under the federal False Claims Act, 31 U.S.C. § 3729.

The case was vigorously contested.  Dr. Rosen contended the evidence clearly demonstrated that Exact Sciences offered financial incentives to induce patients who had not taken the Cologuard tests to use and return the kits so that Exact Sciences could bill for them.  It was important for Exact Sciences to get patients to return the kits because it only gets paid for Cologuard kits that patients use, return, and that it tests.  Exact Sciences, on the other hand, denied it committed any violation of the Anti-kickback Statute or the False Claims Act and claimed it sent the financial incentives to get people screened for colon cancer.

The Relator and his counsel were able to obtain this significant recovery despite an unprecedented Advisory Opinion issued by the Office of Inspector General of the Department of Health and Human Services during the late stages of the litigation that Exact Sciences procured and contended absolved it of any liability.  The settlement was reached on the eve of trial while a Motion to Exclude the Advisory Opinion was pending before the Court.

“Dr. Rosen is a courageous man who spent most of his career fighting against fraud, waste, and abuse in the Medicare program,” said Brandon Peak of PWMC, lead trial counsel for the relator.  “He brought this case to the attention of the United States Government because of his strong belief that medical decision-making should not be influenced by financial incentives or profit motives, which in the case of laboratory tests can lead to unnecessary testing and waste taxpayer money.  It was an honor to represent Dr. Rosen throughout this hard-fought case, which had more twists and turns than a country road.”

Joseph Colwell of PWMC said, “the Medicare system is ripe for abuse by laboratory companies.  Over the last several years, the United States Government has recovered tens of millions of dollars from laboratory companies who pushed expensive and often unnecessary lab tests on people at the cost of significant taxpayer dollars.  Dr. Rosen recognized that substantial potential for abuse, which is why he bravely filed and pursued this case.”

“Dr. Rosen and his counsel were committed to obtaining the best result possible for the American taxpayers.  Despite behind-the-scenes lobbying efforts to get the case dismissed by the defendant with government agencies and powerful individuals in Washington, we never wavered in our resolve to obtain this significant recovery,” said veteran whistleblower Marlan Wilbanks of W&G.  “The truth and the facts should matter more than bureaucratic indifference, or the political influence held by wealthy corporations.  Our law firms will continue to represent whistleblowers in fighting fraud on behalf of the American taxpayers, no matter what individuals or big corporations are responsible for the fraud.” 

To read more about this case, read the attached copy of Report on Medicare Compliance: rmc oct 9