New Testing Company Selected by Raimondo - Former CEO Sentenced to Federal Prison in Kickback Scheme
Friday, August 07, 2020
On Wednesday, Rhode Island Governor Gina Raimondo announced that the state is partnering with two new laboratory companies — Dominion, located in Rhode Island, and Accu Reference, based out of New Jersey, to help with the processing and turnaround time of coronavirus lab tests.
In 2018, Konstantin Bas, the now-former CEO of Accu Reference, was sentenced to federal prison by the U.S. Attorney in the District of Maryland in a “pain management clinic kickback scheme.”
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GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn September 2018, Chief U.S. District Judge James Bredar sentenced Bas and co-conspirator Mubtagha Shah Syed to a year and a day, and three months in prison, respectively, each followed by three years of supervised release, for a scheme in which a Maryland pain management practice referred urine specimens to Bas’s testing lab in return for $1.37 million in kickbacks. Bredar also ordered Bas to forfeit $241,600 and to pay a fine of $5,000.
RI's Urgency in Testing
Repeatedly, Raimondo set lofty testing goals to battle the coronavirus. She said the expansion of testing was critical to successfully reopening and keeping the economy open.
On May 6, Raimondo outlined her plan to increase testing. In the first month of coronavirus cases in the state, Rhode Island had struggled to test over 200 people a day. By early May, the state did not test even 2,000 a day — but Raimondo said that the state was averaging 2,700 a day, and wanted to get to 20,000 a day by the fall.
In July, Raimondo backed off that testing goal as testing dramatically decreased. Nursing homes decried the lack of timely test results; a Rhode Island mom waited ten days for a test result for her nine-year-old.
Raimondo said that a quicker testing turnaround time is necessary to send children back to school in the fall.
On August 5, Raimondo announced the new partnerships.
"After a competitive bidding process, Rhode Island has contracted with two labs – Accu Reference and Dominion Diagnostics – that are going to majorly expand our testing capacity and guarantee us results within an average of 48 hours," said Raimondo. "Starting next week, Accu Reference and Dominion will each run 1,000 Rhode Island tests per day – 2,000 in total. By next month, Dominion will increase their capacity to 7,000 tests per day. That will bring us up to 9,000 tests – including Accu Reference, Dominion, the State Health Lab and some other private labs – that are providing results in 48 hours or less."
Raimondo's office confirmed the New Jersey-based Accu Reference as one of the state's two partners; it did not, however, respond to request for comment on whether it had concerns about the company -- and their track record.
About Kickback Scheme
According to the U.S. Attorney’s office in Maryland, Bas began using co-conspirator Mubtagha Shah Syed to market Accu Reference’s services in the kickback scheme that started in 2010 and continued through 2012.
The U.S. Department of Justice reported the following:
"In February 2011, Syed had a meeting with Muhammad Ahmad Khan, the chief administrative officer (CAO) of a group of Maryland-based pain management medical clinics that were incorporated as Advanced Pain Management Services but that operated under the name of American Spine Center (APMS/ASC). The clinics were owned and operated by Drs. Atif Malik and Sandeep Sherlekar. APMS/ASC required patients who were prescribed pain relief medications to submit urine samples for testing in order to monitor the levels of pain medication or other narcotics in their bodies.
During their February 2011 meeting, Syed and Khan discussed the possibility of APMS/ASC referring its patients’ urine toxicology specimens to Accu Reference for testing in return for the payment of kickbacks. Khan discussed the plan with Malik and Sherlekar who assigned Vic Wadhwa, APMS/ASC’s Chief Financial Officer (CFO), to conduct additional discussions concerning the arrangement.
Syed arranged for a meeting between Bas and Wadhwa during which they agreed that Accu Reference’s profits from the urine toxicology tests would be equally divided between Accu Reference and APMS/ASC personnel. In addition, Bas agreed to pay Syed a 5% share of the proceeds for his role in putting the transaction together.
Unknown to Bas, Wadhwa told Malik and Sherlekar that he and Bas had agreed on a figure of $35 per specimen cup for the kickbacks, which was significantly lower than the amount of the kickbacks Bas would actually be paying under his agreement with Wadhwa. This allowed Wadhwa and Khan to skim off approximately 60% of the kickback payments for themselves.
Each month from April 2011 through July 2012, APMS/ASC referred between 700 and 1,300 patient urine specimens to Accu Reference in return for kickbacks. Accu Reference received approximately $4.4 million in payments from claims submitted to Medicare and private insurers for testing the specimens submitted by APMS. Bas caused his companies to pay kickbacks totaling approximately $1.37 million to Wadhwa and his co-conspirators."
New CEO Named
Sherlekar died before his initial appearance and arraignment; Malik was sentenced to 8 years in prison; Wadhwa was sentenced at a later date; Khan at the time when named as a co-defendant was a fugitive.
Calls and emails to Accu Reference for were not responded to on Thursday.
In 2017, Accu Reference announced that Kamran Alison was appointed Chief Executive Officer (CEO) of the company.
In the announcement, Alison is quoted as saying he had been with the company for “more than five years” and “witnessed the laboratory earning an excellent reputation among medical professionals and patients.”
“Accu Reference is a state-of-the-art medical testing laboratory service that provides a complete range of tests for diagnosis, screening or evaluation of diseases and health conditions,” state the company. “We are certified under the federal government’s Clinical Laboratory Improvement Amendments (CLIA) and operate in compliance with all governmental regulations. We use the latest diagnostic technology. As new medical tests become available, we update our list of services.”
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