A Florida Lab Self-Reported Its Kickback Problem and Paid $9.8 Million: Why That Was Still the Right Call

On July 20, 2026, the Justice Department announced that NeoGenomics Laboratories, a cancer testing lab headquartered in Florida, would pay $9,813,260 to resolve allegations that it violated the Anti-Kickback Statute by paying referring providers below fair market value for consulting services and paying outside recruiters based on the referrals they generated. No criminal charges were announced. That last sentence is the whole story. The same facts, developed by federal agents instead of disclosed by the company, could have produced an indictment instead of a settlement check.

NeoGenomics self-disclosed its kickback problem before the government found it. That timing is why this settled instead of becoming an indictment.

Key Takeaways

• NeoGenomics paid $9.8 million after self-disclosing compensation arrangements the government said violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b.
• Services priced below fair market value for referral sources can trigger the Stark Law, 42 U.S.C. § 1395nn, even when no cash changes hands.
• Self-disclosure, cooperation, and remediation kept the matter civil under the False Claims Act, 31 U.S.C. § 3729. No criminal charges were announced.
• Laboratory referral arrangements are a stated federal enforcement priority in 2026, and South Florida remains one of the busiest healthcare fraud districts in the country.
• The same conduct, discovered by the government first, could support felony charges under the AKS or 18 U.S.C. § 1347.

What NeoGenomics Disclosed and What It Paid

According to the DOJ press release, NeoGenomics ran a program called the Laboratory Clinical Initiative. Through it, the company provided consulting services to 28 health care providers who wanted to build in-house flow cytometry and FISH diagnostic testing capability. The government alleged that some of those services were priced below fair market value, and that the discount functioned as remuneration to induce those providers to send clinical laboratory referrals back to NeoGenomics. The United States contended this violated the Anti-Kickback Statute, and that the resulting financial relationships tainted the claims the lab submitted, implicating the Stark Law and the False Claims Act.

The second allegation matters more for most businesses. NeoGenomics paid independent consultants to identify potential provider customers, and those payments allegedly varied in part with the volume or value of resulting referrals. Percentage-based marketing compensation tied to federal health care business is one of the most common structures in the industry, and one of the structures the government attacks most consistently.

NeoGenomics self-disclosed the conduct, cooperated with the investigation, ended the consulting agreements at issue, terminated responsible employees, and kept supplementing its disclosure as the investigation progressed. The settlement expressly credits that cooperation. The claims resolved are allegations only, and there has been no determination of liability.

Labs Are a Front-Line Target Right Now

This was not an isolated action. Five days earlier, Labcorp agreed to pay $14.5 million to resolve separate False Claims Act allegations. Two national laboratory settlements in one week reflects where the government is looking. This year the administration launched the Task Force to Eliminate Fraud and stood up the National Fraud Enforcement Division, and laboratory billing and referral arrangements sit near the top of the priority list.

The investigative method has changed too. HHS-OIG and DOJ no longer wait for whistleblowers to explain a referral network. Claims data analytics can map which providers send tests where, how volume moves after a consulting agreement is signed, and which labs grow faster than their markets.

Where Civil Exposure Ends and Criminal Exposure Begins

The Anti-Kickback Statute is a criminal statute. A violation is a felony punishable by up to 10 years in prison per violation, plus fines and potential exclusion from federal health care programs. The government does not need to prove the tests were unnecessary or that any patient was harmed. It needs remuneration, intent, and a nexus to federal health care program business. Remuneration means anything of value, including a discount on consulting services. In the Eleventh Circuit, an arrangement can violate the AKS even if it had legitimate purposes, so long as one purpose was to induce referrals.

The Stark Law works differently. It is a strict liability civil statute governing physician referrals, so a below-market arrangement can create repayment exposure even without any bad intent. The False Claims Act then multiplies the problem with treble damages and per-claim penalties, which is how a pricing issue on consulting services becomes a $9.8 million settlement. When prosecutors believe the arrangement was built to deceive, healthcare fraud charges under 18 U.S.C. § 1347 enter the picture, carrying up to 10 years per count.

What separates a civil resolution from a criminal prosecution is rarely the structure of the arrangement. It is the evidence of intent: emails that read like referral purchasing, compliance warnings that were overridden, valuations that were never done. And it is how the government learned about the conduct.

The Mistakes That Turn Audits Into Indictments

The same errors appear in nearly every laboratory and provider case. Executives talk to HHS-OIG agents at the office without counsel, trying to be helpful, and create interview memos that follow the case forever. Companies produce documents in response to a civil investigative demand or audit without a litigation hold or a privilege strategy, assuming the matter is purely civil. Parallel civil and criminal proceedings are the norm in this space, not the exception.

The Self-Disclosure Decision Is a Defense Decision

Self-disclosure worked for NeoGenomics. That does not make it the right call for every company, and it is never the first step. First comes a privileged internal investigation: what happened, who knew, what the documents show. Second comes the legal analysis, including fair market value opinions and AKS safe harbor defense work, because an arrangement that fits the personal services safe harbor may need no disclosure at all. Third comes a criminal exposure assessment by someone who defends these cases.

Only then does the disclosure question get answered: the HHS-OIG Self-Disclosure Protocol, the CMS Stark disclosure process, a negotiated presentation to DOJ, or a defense posture. Disclosure to the wrong agency, at the wrong time, with the wrong scope, waives leverage you cannot get back. Done well, it can support a DOJ declination strategy or, as here, a civil resolution with cooperation credit.

Why Timing Decides These Cases

Every option in the last section expires. Self-disclosure only earns credit if it beats the government to the facts, and a qui tam relator may already have filed under seal, which is why false claims act qui tam defense analysis belongs in the first week of any internal review. If a civil investigative demand, an HHS-OIG subpoena, or a federal grand jury subpoena has already arrived, the window has shifted and federal grand jury subpoena defense becomes the immediate priority. A target letter shifts it again, and at that point you need a federal target letter attorney the same day, not the same month.

Charging decisions are fluid early. Prosecutors weighing a civil referral against an indictment can be moved by valuation evidence, context for the compensation structure, and early, credible engagement from experienced counsel. NeoGenomics bought its outcome early. That option was not available later.

Common Questions

Aaron M. Cohen, federal criminal defense attorney, Boca Raton, Florida

Facing a Healthcare Fraud Investigation in Florida?

If your laboratory, practice, or company has received a civil investigative demand, an HHS-OIG subpoena, or an inquiry about referral arrangements, the decisions you make in the next few weeks will shape everything that follows. Aaron M. Cohen has spent more than 30 years defending physicians, executives, and businesses in federal investigations, in Florida and nationwide. If you or your loved ones have been arrested, call Aaron M. Cohen, 24 hours a day, to get help.