Greensburg Drug Lab Owner and Kentucky Psychiatrist Charged in Kickbacks for Referrals Scheme

PITTSBURGH – A resident of Pittsburgh, Pa., and a resident of Louisville, Ky., were indicted by a federal grand jury in Pittsburgh on a charge of conspiracy, United States Attorney Scott W. Brady announced today.

The indictment, returned on February 21, named William J. Hughes, 70, of Pittsburgh, Pa., and Dr. Varanise C. Booker, 62, of Louisville, Ky.

According to the indictment presented to the court, Universal Oral Fluid Labs (UOFL) was a clinical drug testing and drug screening lab located in Greensburg, Pa. William J. Hughes was the owner and operator of UOFL. Dr. Varanise C. Booker was a Kentucky licensed physician in the area of psychiatry, who owned and operated Family and Children Behavioral Health Services, in Louisville, Ky.

Both Dr. Booker and UOFL were enrolled providers in the Medicare program and the Kentucky Medicaid program. As a condition of becoming a Medicare and/or Medicaid provider and being authorized to bill Medicare and/or Medicaid, Dr. Booker and UOFL were required to certify on their enrollment applications, Medicare Form 885B, that they would comply with all applicable federal and state laws, regulations, policies, procedures, and program requirements.

UOFL billed, and was paid by, Medicare and KentuckyMedicaid for performing drug tests and related services for Medicare and Medicaid beneficiaries who were referred to UOFL by physicians enrolled in the program, including Dr. Booker. UOFL also billed, and was paid by, various private health care insurance companies in the business of providing health care insurance to individuals and entities under various insurance policies, pursuant to which the private insurers paid UOFL for drug tests and related services performed for insureds who had been referred to UOFL by physicians.

From in or around October, 2011, and continuing thereafter until at least August, 2013, Dr. Booker conspired with Mr. Hughes and others to commit offenses against the United States, that is, to solicit and receive remuneration, directly and indirectly, overtly and covertly, in cash and in kind, namely kickbacks, from Mr. Hughes and UOFL in return for referring patients to UOFL for the furnishing and arranging for the furnishing of items and services, that is, the referral of patient lab work, for which payment was made in whole or in part under a federal health care program,

namely, Medicare and Medicaid, contrary to Title 42, United States Code, Section 1320a-7b(b)(1)(A).

Dr. Booker received cash payments from Mr. Hughes and UOFL in exchange for referring Medicare and Medicaid patients to UOFL. Likewise, Dr. Booker received monthly checks from Mr. Hughes/UOFL in exchange for referrals, including Medicare and Medicaid referrals. Mr. Hughes and Dr. Booker also agreed on the value of the "kickbacks" that Mr. Hughes/UOFL would pay Dr. Booker for each referral of lab work sent to UOFL by Dr. Booker. Specifically, the monthly "kickback" checks Mr. Hughes paid to Dr. Booker were paid pursuant to the terms of a "Joint Venture Agreement" that Dr. Booker entered into with Mr. Hughes/UOFL. Under this "Joint Venture Agreement," Dr. Booker referred her patients, including Medicare and Medicaid beneficiaries, to UOFL for saliva drug testing. Mr. Hughes/UOFL, in turn, billed third-party payors, including Medicare and Medicaid, for such tests, and then "kicked back" to Dr. Booker, for each referred patient, reimbursement amounts for the tests that exceeded the agreed upon threshold of $150.00. Dr. Booker received these "joint venture" payments from Mr. Hughes in exchange for the referrals Dr. Booker provided to UOFL, and not in exchange for the performance of any other services.

Between September, 2012 and August, 2013, Dr. Booker received $843,242.31 in "kickbacks" from Mr. Hughes/UOFL for referrals. UOFL then received millions of dollars from third party payors (including Medicare), based on Dr. Booker’s referrals.

The law provides for a maximum sentence, for each defendant, of five years in prison and a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation, Health and Human Services Office of Inspector General, Internal Revenue Service-Criminal Investigation, and the Pennsylvania Office of Attorney General Medicaid Fraud Control Section conducted this investigation.

An indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.