Quest Diagnostics has their corporate headquarters at 500 Plaza Drive in Secaucus. (Google Earth)
SECAUCUS, NJ — Quest Diagnostics, Inc., which has its corporate headquarters in Secaucus, had to pay a $13-million fine to settle allegations that Quest gave doctors and other business executives illegal kickbacks in exchange for their business, U.S. Attorney Robert Frazer announced Nov. 6.
Federal prosecutors say Quest offered doctors and executives illegal kickbacks — including free tickets to suite seats at MetLife stadium — in exchange for them using Quest.
Quest provides laboratory testing services to physicians, hospitals and patients throughout the United States. Quest's principal place of business is 500 Plaza Drive in Secaucus.
The Nov. 6 settlement resolves allegations that, between July 25, 2013 and August 3, 2022, Quest violated the Anti-Kickback statute by knowingly and willfully offering and giving healthcare providers and other decision-makers valuable and exclusive entertainment events to induce patient referrals to Quest. Then, Quest submitted or caused the submission of false claims for lab services that Medicare and New York and New Jersey Medicaid paid for.
The U.S. Anti-Kickback law prohibits offering, paying, soliciting or receiving anything of value to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs.
It is intended to ensure that the best interests of patients, and not financial incentives, drive the medical judgement of healthcare providers.
In particular, the settlement resolves allegations that:
In 2013, Quest entered into a Naming Rights and Sponsorship Agreement with the New York Giants. As part of the overall agreement, the Giants provided suites to Quest at MetLife Stadium for home games. Quest also gained various marketing, commercial programming, and hospitality benefits.
Through the benefits Quest gained from its agreement with the Giants, Quest offered and provided valuable and exclusive entertainment at Giants home games and other commercial hospitality events free of charge to decisionmakers from Quest's client accounts who could refer patients for lab testing to Quest, or who could arrange for or recommend referrals.
The events included:
Game Day Suite Seats: Seats in Quest's suites at MetLife Stadium to watch Giants' home games, where Quest also provided food, alcohol, and other beverages, and, in certain instances, parking or field access to watch pre-game warmups.
VIP Training Camp: Events that gave VIP customers the opportunity to watch the Giants practice from a dedicated VIP section of the training camp – right next to the field for better viewing and player interaction opportunities. The event included breakfast or lunch and the opportunity to get player autographs and meet some of the players.
Draft Chalk Talks: NFL style chalk-talk presentation and interactive session hosted by former New York Giants "legends," where they walked Quest customers through draft strategy, draft predictions, and their own thoughts on that year's lineup. Invitees sat in on an interactive mock draft and heard stories about the legends' own draft experiences. The event included dinner at the Giants' training center cafeteria, a meet-and-greet with alumni players, and an insider's tour of the training center.
Family Combine Days: Events in which clients and their family members could participate in football drills led by Giants players. Family Combine Days also included opportunities for photos and autographs and a tour of the training center.
The settlement further resolves allegations that:
Quest provided these free entertainment events to its clients, and in certain instances, to family members and guests of its clients, to induce business referrals to Quest. The company targeted decisionmakers from current and prospective client accounts who had the power to drive the account's business to Quest. Company executives and sales representatives targeted key decisionmakers from Quest's highest-value client accounts for these events, to maximize Quest's return on investment (ROI) from providing the events to its clients. Quest sales representatives were required to attend the events with the individuals they invited, and they tied specific sales goals to the Giants invitations and shared those goals with Quest's senior management.
For the 2013 through 2016 football seasons, Quest measured its ROI from providing free Giants events to its clients. Quest calculated the revenue it received from client accounts after entertaining client decisionmakers at the Giants events for up to one year after the event, and Quest compared the revenue gained after the event to the revenue received from the client account before the event.
Quest billed Medicare and New York and New Jersey Medicaid for claims for lab testing that were referred from client accounts that Quest entertained for free at Giants entertainment events.
U.S. Attorney Frazer credited special agents of the FBI, under the direction of FBI-Newark Special Agent in Charge Stefanie Roddy, special agents of the U.S. Department of Health and Human Services - Office of Inspector General, under the direction of Special Agent in Charge Naomi D. Gruchacz, and civil investigator Jeffrey DeFuria, and agents and investigators with the U.S. Attorney's Office, District of New Jersey, with the investigation leading to the settlement. U.S. Attorney Frazer also credited HHS-OIG's Office of General Counsel for its assistance in this matter.