Clinical laboratory NEXT Bio-Research Services LLC, also known as NEXT Molecular Analytics and based in Chester, Virginia, has agreed to pay at least $758,000 to settle allegations that it provided illegal kickbacks to doctors and marketers. The company will also cooperate with the Department of Justice (DOJ) in ongoing investigations and litigation involving other participants in the alleged schemes.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division stated: “This settlement shows DOJ’s commitment to rooting out illegal kickback schemes that have no place in our federal health care programs. The Department is committed to pursuing these important investigations and health care fraud enforcement across the board.”
U.S. Attorney Eric Grant for the Eastern District of California said: “Physicians should make decisions based [on] the best interests of their patients, not their own personal financial interests. This settlement demonstrates my office’s commitment to taking all appropriate action to prevent improper inducements that can corrupt the integrity of physician-patient relationships.”
Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG) added: “Violations of the Anti-Kickback Statute are not victimless crimes — they compromise the integrity of medical decision-making and betray the trust patients place in their providers. When health care decisions are shaped by hidden financial motives, patients may be misled, unnecessary services may be rendered, and taxpayer-funded programs may be manipulated for personal gain. HHS-OIG is resolutely committed to holding participants in federal health care programs fully accountable to the law.”
The Anti-Kickback Statute makes it illegal to offer or receive payments intended to induce referrals for items or services covered by Medicare, Medicaid, or other federally funded healthcare programs.
As part of its agreement with federal authorities, NEXT will pay $758,000 plus additional amounts if certain financial contingencies occur. The government alleged that NEXT paid kickbacks disguised as consulting fees and medical director fees to doctors in Texas and Arkansas as incentives for ordering its lab tests. The company was also accused of paying commissions tied to referral volume and value for independent contractor marketers who recommended its services.
These practices allegedly led NEXT to submit claims for reimbursement from Medicare, Medicaid, and TRICARE while knowing about these prohibited arrangements.
The case originated from a whistleblower lawsuit filed under the False Claims Act by Sunil Wadhwa and Ken Newton. Under this law's provisions, private parties can sue on behalf of the government; Wadhwa and Newton will receive $113,700 from the settlement proceeds.
The resolution involved collaboration between multiple branches within the DOJ—including trial attorneys from its Civil Division—as well as U.S. Attorney’s Offices in New Jersey and California with support from HHS-OIG. Related allegations were previously settled with individuals including NEXT’s National Sales Director and independent contractor marketers OC Genetic Consultants Inc. and Ralston Health Group Inc.
Authorities emphasized that combating healthcare fraud remains a priority through enforcement tools like the False Claims Act. They encourage anyone with information about potential fraud or abuse involving federal healthcare programs to contact HHS at 1-800-HHS-TIPS (800-447-8477).
Officials clarified that these settlements resolve allegations only; there has been no determination regarding liability.
