SAN DIEGO–The former vice president of market development for Proove Biosciences. Incorporated., pleaded guilty in federal court to conspiring to pay physicians kickbacks to order genetic tests for Medicare beneficiaries in violation of the Anti-Kickback Statute.
According to Donald Joseph Matthews’ plea agreement, Proove paid doctors at least $3.5 million to induce them to order Proove’s DNA tests—which the company claimed could determine a patient’s risk of abusing certain prescription narcotics. Proove billed approximately $45 million to the Medicare program for the tests, in violation of Medicare’s prohibition against kickbacks, and Proove received approximately $21 million in unlawful payments. Proove concealed the true nature of the kickbacks by falsely characterizing the payments as compensation for participating in a clinical research program sponsored by Proove. In furtherance of the scheme, Proove placed its own employees in doctors’ offices. The Proove employees collected a cheek swab and completed most of the paperwork associated with the “clinical research” program. Without the financial compensation, Matthews admitted that most doctors were not interested in ordering Proove’s tests for their patients.
The compensation Proove paid to doctors was directly tied to the volume of tests that a doctor ordered and whether a doctor continued to order more tests from Proove over time. When doctors were not paid, they threatened to “pull the plug” and stop ordering Proove’s genetic tests. When the doctors complained about delayed payments, a Proove executive demanded that the doctors increase their testing volume.
“Kickbacks corrupt the medical judgment of physicians, generate unnecessary tests and treatments, increase health care costs, and create unfair competition,” said U.S. Attorney Robert Brewer. “Our office will aggressively move to terminate these illegal schemes and prosecute those who engage in them.” Brewer commended the excellent work of Assistant U.S. Attorneys Joseph Green and Andrew Galvin, who investigated this important case.
“Our nation’s healthcare system cannot tolerate kickbacks to physicians while criminals line their pockets with taxpayer-funded healthcare dollars, particularly in light of our nation’s current struggles with the COVID-19 pandemic,” said Acting Special Agent in Charge Omer Meisel, San Diego Division of the Federal Bureau of Investigation. “The FBI will pursue those criminals who corrupt the health care system rather than support legitimate, necessary testing and treatment for patients.”
Matthews pleaded guilty before U.S. Magistrate Judge Karen Crawford. His sentencing is scheduled for October 26 before U.S. District Judge William Hayes.