Medicare Fraud Settlement: Advanced Pathology Solutions Agrees to $30M

Advanced Pathology Solutions (APS) in North Little Rock has agreed to a $30 million settlement with the federal government to resolve allegations of Medicare billing fraud and kickback schemes. Federal prosecutors accuse APS of incentivizing doctors for patient referrals and ordering unnecessary tests to manipulate Medicare claims. This action follows a whistleblower report in 2020 that highlighted improper practices dating back to 2015.

U.S. Attorney for the Eastern District of Arkansas, Jonathan Ross, noted that APS set up "lean labs" in gastroenterology clinics nationwide. These labs facilitated handling biopsy specimens, with an informal agreement for exclusive patient referrals to APS. According to federal documentation, APS Director of Pathology Nancy Davis allegedly instructed staff to find medical literature that could justify additional testing, significantly increasing claims from partnered clinics.

In response to these alleged schemes, the U.S. Department of Health and Human Services temporarily suspended Medicare payments to APS, pending further investigation to mitigate financial impacts. As part of the settlement, APS must enter a five-year Corporate Integrity Agreement with the Office of Inspector General, focusing on enhanced compliance measures such as audits and employee training. Medicare payments are set to resume post-settlement, though APS has not admitted liability, and the case remains a civil proceeding.