Lab chief: Hundreds of doctors took bribes in Medicare fraud scheme

Defendants admit to making $100 million through overbilling

Topics: Finance, Reimbursement, Medicare, Billing and Collections, Revenue Cycle

June 12, 2013

The former owner of a New Jersey laboratory has pleaded guilty in connection with a $100 million insurance fraud scheme in which he says hundreds of doctors accepted millions of dollars in bribes.

Scott Nicoll—the former president of Biodiagnostic Laboratory Services—was among seven people who pleaded guilty in Newark federal court to money laundering and conspiracy to violate the Anti-Kickback Statute. The defendants admitted to paying doctors to send blood samples to their company and perform unnecessary tests.

The defendants admitted that the scheme netted more than $100 million in reimbursements from Medicare and private insurers through overbilling on blood samples and those tests, prosecutors say.

After the court hearing, Nicoll announced through attorney John Whipple that "hundreds" of doctors had demanded illegal payoffs in exchange for business.

"This case clearly involves a two-way street between doctors and unfortunately, my client," Whipple said, adding, "In many occasions, it was the doctors themselves that insisted upon the payment of funds to have their bloodwork and other tests sent to the lab."

According to NBC New York, FBI agents raided the lab's offices in April for records and documents. Officials have not announced how many doctors may be arrested in connection with the scheme. However, Whipple says the authorities have been given the names of doctors involved.

"The doctors know who they are, there is no question about it," Whipple said (AP/San Francisco Chronicle, 6/10; Dienst/Valiquette, NBC New York, 6/11).

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