Lab settles Medicare fraud allegations

MADISON, Wis. (AP) — A laboratory company in western Wisconsin and its owners have agreed to pay the federal government $8.5 million to settle claims it submitted false billing information to Medicare.

Federal prosecutors say the settlement resolves allegations that Pharmasan Labs, of Osceola, and its billing company, NeuroScience, also violated Medicare rules on services referred by practitioners who weren’t doctors.

The U.S. Attorney for the Western District says the whistleblower who came forward with allegations of fraud will receive $1.1 million of the settlement money.

Pharmasan’s Dr. Gottfried Kellermann says the companies employed a billing manager who submitted the false information. The manager left in 2012 after which the companies sued him, in part, for diverting reimbursements to his own accounts.