Guardant Health Agrees to $945,000 Settlement Over False Claims Act and Stark Law Violations

Guardant Health, a cancer testing company based in California, has agreed to pay more than $945,000 to settle allegations by the Department of Justice (DOJ) of violating the False Claims Act and Stark Law. The settlement includes nearly $914,000 to resolve False Claims Act violations, of which more than $600,000 is restitution. Additionally, Guardant will pay over $31,000 in an administrative settlement with the Defense Health Agency, according to a DOJ press release on Tuesday.

The DOJ recognized Guardant Health's voluntary self-disclosure to the U.S. Department of Health and Human Services’ Office of the Inspector General and other remedial measures undertaken during the settlement process.

The allegations cover a period from May 2021 to May 2023, during which a physician at Guardant facilitated the hiring of his stepdaughter and a close family friend by the company. The DOJ's settlement claims that the physician's test orders increased significantly after his stepdaughter began working at Guardant in March 2022, with orders rising from approximately 50 tests per quarter to between 124 and 398 tests per quarter.

The DOJ alleged that Guardant submitted false claims to receive Medicare payments for clinical laboratory services referred by the physician, in violation of the Stark Law. The company knowingly submitted or caused the submission of false claims for tests ordered by the physician to federal healthcare programs.

Upon receiving information regarding the physician’s referrals, Guardant ceased billing federal healthcare programs for tests ordered by the physician and terminated the employment of his stepdaughter, according to the DOJ.

In an emailed statement, a Guardant spokesperson said, "The company 'successfully resolved an issue stemming from the actions of a former employee.' Upon learning of the issue, we promptly notified appropriate authorities, cooperated fully with their investigation, and reinforced internal controls to prevent similar issues in the future. We are committed to operating our business with integrity and transparency and are pleased this matter is resolved."

By fLEXI tEAM