HEALTH LINE CLINICAL LABORATORIES, ARAMAIS PARONYAN, M.D., AND NATELLA LALABEKYAN AGREE TO PAY THE U.S. AND CALIFORNIA $10 MILLION TO SETTLE ALLEGATIONS OF  MEDICARE AND MEDICAID FRAUD

"Health care fraud and abuse is a fraud against the American taxpayer when it is directed at Medicare and Medicaid.  This settlement again demonstrates the United States' commitment to protecting federal funds from fraud and abuse," said Peter D. Keisler, Assistant Attorney General in charge of the Civil Division. "The federal health care system operates on the good faith and honesty of its providers, and we will actively pursue those who misuse the system for financial gain."

The allegations arose from a lawsuit filed by two former HLCL salesmen, Kim Jenkins and Timothy Mills, under the qui tam or whistleblower provisions of the False Claims Act, a federal law that allows private individuals to sue on behalf of the United States.  Ms. Jenkins and Mr. Mills alleged that HLCL, a clinical laboratory, and its owners, Mr. Paroynan and Ms. Lalabekyan, improperly added unnecessary blood tests to comprehensive blood test panels and profiles that were ordered by physicians from HLCL for Medicare and Medicaid patients.  HLCL, Mr. Paroynan and Ms. Lalabekyan caused doctors to order or appear to order these medically unnecessary tests by unilaterally adding the tests to the commonly ordered profiles regardless of medical necessity, and not disclosing to physicians that HLCL was charging the Medicare and Medicaid program for each of the added, medically unnecessary tests.  As a result, HLCL received more reimbursement from Medicare and Medicaid than they should have.

"Medicare and Medicaid fraud and abuse is fraud and abuse against the American taxpayer," said Kevin V. Ryan, United States Attorney for Northern District of California.  "The allegations in this case suggest a systematic effort to take money designed to aid the elderly and ill and to line the defendants' pockets instead." 

"More than 6 million Californians depend on Medi-Cal for health care.  One in three childbirths and two-thirds of all nursing home care are funded by Medi-Cal," said California Attorney General Bill Lockyer.  "Every dollar stolen from the system impacts the number of services provided and the number of recipients covered by this crucial safety net.  We will continue to work with local and federal authorities in aggressively prosecuting those who rip off the Medi-Cal program, its beneficiaries and the taxpayers."

The civil investigation and settlement were jointly handled by the Office of the United States Attorney for the Northern District of California, the Civil Division of the United States Department of Justice, and the California Attorney General's Office, with assistance from the United States Department of Health and Human Services Office of Inspector General, including its Office of Counsel, and the Federal Bureau of Investigation.