Rogue Referrals: Whistleblowers uncovers Admera’s Anti-Kickback violations; will collect almost $1 million.
Customer acquisition in healthcare.
Finders fee, affiliate links, kickbacks. These terms all describe basically the same activity—customer acquisition—in different industries. Let’s take the example of affiliate links. Internet businesses are built on the backs of affiliate links. Sometimes a user knows exactly what they want and go to Amazon to find it. Other times, a user goes to a review website or watches a TikTok influencer and stumbles upon a link to a product they want to buy. Those links are affiliate links, unique URLs that track referrals from one website to another. When a user clicks on an affiliate link and makes a purchase, the affiliate earns a commission from the sale, creating a financial incentive for promoting products or services. The influencer gets some amount of money for directing their followers to a particular product. In the context of internet commerce, no biggie.
Affiliate links are strongly discouraged (regulated) in healthcare. In healthcare, they’re not called “affiliate links.” Instead, it’s called a kickback.
Paying for referrals is frowned upon because healthcare decisions should put people over profits. A doctor shouldn’t refer a patient to a particular provider because they’re getting paid. No, the referral should happen because it’s in the best interest of the patient. The Anti-Kickback Statute stops people in healthcare from paying or receiving money for sending patients to certain services or products covered by government programs like Medicare and Medicaid. It makes it illegal to offer or accept kickbacks, bribes, or rewards for referrals.
Where a healthcare provider pays for referrals, it’s called a kickback or a bribe. That should be enough to let you know that it’s more than frowned upon—it can lead to sever penalties and exclusion from federal healthcare programs like Medicare and Medicaid. And if a company is told that it is paying illegal bribes it should probably , you know, at least investigate if not stop immediately.
The Scheme
Admera Health is a company that provides genetic lab testing services. It had a web of third party marketers that it paid “in return for recommending or arranging for the ordering of genetic testing services.” That, if true, is a bribe and violates the Anti-Kickback Statute. Admera acquired customers by paying for referrals that took into account the volume and value of genetic testing referrals. On top of that, Admera was allegedly told that its payment of commission violated the Anti-Kickback Statute and continued with its scheme anyways. Admera did not stop its conduct, instead it allegedly doubled down.
Ultimately, t was one of their third-party marketers that turned them in for violating the law. Apparently the whistleblower reward was more lucrative than the kickbacks.
The penalty
$5,389,648. The Settlement structure mirrors the complexity of the scheme it seeks to penalize. Though the initial payment is relatively modest at $225,000, the agreement outlines a series of escalating payments linked to Admera's future financial performance. This innovative approach acknowledges both the gravity of the allegations and the company's current financial limitations.
Industry experts are particularly intrigued by the settlement's potential long-term impact. If Admera's financial situation improves, the company could be liable for millions more, with additional payments triggered by revenue milestones, asset sales, and even the resolution of an existing legal judgment against the firm.
The whistleblower
The whistleblowers were Sunil Wadhwa and Ken Newton, co-founders of Financial Halo LLC/MedXPrime, a former third-party marketer for Admera.
The whistleblower reward
Wadhwa and Newton will receive $862,343 of the proceeds from the settlement. Under the qui tam provision of the False Claims Act, a private party (also referred to as a whistleblower or relator) may file an action on behalf of the United States and receive a portion of the recovery, typically between 15-30%.
If you think you’ve observed fraud or misconduct, we can evaluate your options. Vivek Kothari is a former federal prosecutor who represents whistleblowers. For a free consultation, contact Vivek by email, phone, Signal, or fill out the contact form.
Image source: Averyaudio, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons