United States Sues BestCare Laboratories Under False Claims Act

The United States has sued BestCare Laboratories Inc. and its founder Karim A. Maghareh, for violations of the federal False Claims Act. The government alleges that the defendants knowingly filed false claims with Medicare for mileage-based travel allowance fees for lab technicians.

Maghareh founded BestCare, a clinical laboratory in Houston, in 2002. According to the government,  BestCare transported laboratory test specimens via air cargo from patients living in Texas nursing homes in Dallas, Austin, San Antonio, El Paso and Waco, to the BestCare laboratory near Houston.The United States alleges that in billing Medicare for transporting the specimens, however, BestCare asked to be reimbursed at the higher rate paid for ground travel, as though the company’s technicians drove the specimens individually from the nursing homes to the lab in Houston. The complaint also claims that Maghareh authorized the phony billing.

The original lawsuit is yet another example of a False Claims Act suit brought under the qui tam provisions of the Act. The False Claims Act allows the government to recover an amount equal to three times its damages plus civil penalties for each violation. The whistleblower who actually files suit on the government’s behalf is referred to as the “relator.” The relator in a health fraud case is often an employee with inside, first hand knowledge about a company’s scheme to defraud Medicare. In this case, the whistleblower was Richard Drummond, who will be entitled to a portion of any recovery the government receives in the case. The False Claims Act allows a relator to receive 15 to 25 percent of any recovery if the United States intervenes in the suit, as it did in this case against BestCare. When the government decides not to intervene, the relator is entitled to 25 to 30 percent of any recovery.

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