Whistleblower Lawsuit Against Exact Sciences Leads to $13.75 Million Settlement

On September 26, 2023, Wilbanks & Gouinlock, LLP and Peak Wooten McDaniel & Colwell, LLP secured a $13.75 million settlement in a False Claims Act and Anti-Kickback Statute case just before trial. The lawsuit was filed by Dr. Niles Rosen, a retired pathologist and whistleblower, on behalf of the United States government.

Most of the settlement will be paid to the U.S. Treasury to reimburse taxpayers, while Dr. Rosen will receive a percentage of the recovery under the False Claims Act.

Case Background and Legal Representation

Dr. Niles Rosen was represented by Marlan Wilbanks, Susan Gouinlock, and Elaine Stromgren of Wilbanks & Gouinlock LLP (W&G), along with Brandon Peak and Joseph Colwell of Peak Wooten McDaniel & Colwell LLP (PWMC). The case was heard in the United States District Court for the Middle District of Florida, Tampa Division, under Judge Mary S. Scriven.

The defendants, Exact Sciences Corporation and Exact Sciences Laboratories, LLC, develop and market Cologuard, an at-home colon cancer screening test used across the United States.

Allegations Against Exact Sciences

Dr. Rosen alleged that Exact Sciences violated the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) by offering Medicare and Medicare Advantage beneficiaries prepaid Visa gift cards to encourage them to return Cologuard test kits for billing to government health programs. He claimed these payments led to false and fraudulent claims under the False Claims Act (31 U.S.C. § 3729).

The case was vigorously contested. Dr. Rosen argued that evidence showed Exact Sciences used financial incentives to drive test kit returns and maximize billing. The company denied wrongdoing, asserting that the incentives were meant to encourage colon cancer screening rather than improperly influence billing.

Legal Challenges and Final Settlement

During litigation, Exact Sciences obtained an Advisory Opinion from the Office of Inspector General (OIG) of the Department of Health and Human Services, which the company claimed cleared it of liability. However, Dr. Rosen and his legal team challenged the validity of this opinion. A motion to exclude it was pending when the case settled.

Statements from Legal Counsel

Brandon Peak (Peak Wooten McDaniel & Colwell LLP), Lead Trial Counsel:
“Dr. Rosen is a courageous man who spent his career fighting fraud, waste, and abuse in the Medicare program. He brought this case forward because he believes medical decisions should not be driven by financial incentives, which can lead to unnecessary testing and waste taxpayer dollars. This case had more twists and turns than a country road, and it was an honor to represent him.”

Joseph Colwell (Peak Wooten McDaniel & Colwell LLP):
“Medicare is vulnerable to abuse by laboratory companies. Over the years, the government has recovered tens of millions from labs pushing costly and often unnecessary tests. Dr. Rosen recognized this potential for fraud and bravely pursued this case.”

Marlan Wilbanks (Wilbanks & Gouinlock, LLP):
“Dr. Rosen and our legal team were committed to achieving the best result for American taxpayers. Despite behind-the-scenes lobbying efforts by the defendant to have the case dismissed, we remained steadfast in seeking justice. The truth and facts should matter more than bureaucratic indifference or corporate influence. Our firms will continue to fight fraud, no matter how powerful the entity responsible.”

Read more about this case in the Report on Medicare Compliance, October 9 Edition.