For several years, there's been a legal case going between Niles Rosen MD - the former, long-time head of the correct coding contract at CMS - and Exact Sciences, over its $75 gift cards. OIG seemed to weigh in heavily in favor of Exact a few months ago - here. Earlier, the DOJ declined to intervene, which is the end of many Qui tam's, but not this one.
A new SEC filing from Exact describes a potential or probable settlement in the case:
Besides the ROSEN settlement, there is also discussion of an older DATE OF SERVICE settlement, $32M, which I believe dates from its Genomic Health Oncotype acquisition.
Re: Rosen, this is the second time a CMS medical director has won a sizable Qui Tam, the prior being Dr Elaine Jeter re Myriad.
EXACT SCIENCES SEC QUOTES:
On June 24, 2019, Niles Rosen M.D. filed a sealed ex parte qui tam lawsuit against the Company in the United States District Court for the Middle District of Florida, that alleged a violation of the Federal Anti-Kickback Statute and False Claims Act for offering gift cards to patients in exchange for returning the Cologuard screening test (the “Qui Tam Suit”). Dr. Rosen seeks on behalf of the U.S. government and himself an award of civil penalties, treble damages and fees and costs.
On February 25, 2020, the Company received a civil investigative demand by the DOJ related to the Company’s gift card program. The Company produced documents in response thereto.
On March 25, 2021, the DOJ filed a notice of its election to decline intervention in the Qui Tam Suit. This election did not prevent Dr. Rosen from continuing the Qui Tam Suit. On April 12, 2021, Dr. Rosen filed an amended complaint against the Company, alleging violations of the Federal Anti-Kickback Statute and False Claims Act.
The Company first learned of the Qui Tam Suit and the DOJ’s election to decline intervention in July 2021.
On June 28, 2023, the Company and Dr. Rosen reached an agreement in principle to settle the claims Dr. Rosen asserted and to resolve the Company’s claim for attorney’s fees, expenses, and costs.
- The agreement in principle contemplates the Company making a payment of $13.8 million, plus legal fees and is subject to negotiation of final terms, approval by the parties and the execution of a definitive settlement agreement.
- In connection with the agreement in principle, the Company recorded an accrual of $13.8 million, plus legal fees, which is included within accrued expenses on the condensed consolidated balance sheet, as of June 30, 2023.
- The accrual amount is based on several factors, conditions, and judgments, and the ultimate resolution of this matter could result in a material loss in excess of the recorded accrual.
See reporting as of March 2023 at Dark Daily - here.