Orangeburg physician to pay $585K settlement for illegal kickbacks

Dr. Moustafa Moustafa and his medical practice, South Carolina Nephrology and Hypertension Center Inc., of Orangeburg and Bamberg, have agreed to pay $585,540 to resolve False Claims Act allegations that they received illegal kickbacks in violation of the Anti-Kickback Statute in return for referring patients for laboratory testing, according to a news release from the U.S. Attorney’s Office in South Carolina.

Moustafa and his practice have agreed to cooperate with the Justice Department's investigations of, and litigation against, other participants in the alleged kickback schemes.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded health care programs, according to the release The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement resolves allegations that Moustafa and his practice received kickbacks in violation of the Anti-Kickback Statute in return for Moustafa’s laboratory referrals and caused the submission of false or fraudulent claims to Medicare and TRICARE, the release stated, including:

• Office and phlebotomy kickbacks: From June 2017 to December 2021, Moustafa and his practice allegedly received thousands of dollars in remuneration disguised as purported office space rental and phlebotomy payments, paid monthly or in a lump sum money order, from a clinical laboratory in Anderson, in return for Moustafa’s laboratory referrals, the release stated.
• Clinical staff kickbacks. From August 2020 to December 2022, Dr. Moustafa and his practice allegedly received from a clinical laboratory in Kenilworth, New Jersey, remuneration in the form of free clinical staff to provide services to Dr. Moustafa’s practice unrelated to that laboratory, in return for Dr. Moustafa’s referrals for laboratory testing.
• Consulting and medical director kickbacks. From September 2019 to March 2023, Dr. Moustafa allegedly received from marketing company Ralston Health Group Inc. (Ralston) thousands of dollars in remuneration disguised as consulting and medical director payments, paid monthly, in return for Dr. Moustafa ordering clinical laboratory services from five laboratories. The settlement resolves allegations that Ralston kicked back to Dr. Moustafa a portion of the commissions those five laboratories paid to Ralston, in return for Dr. Moustafa ordering laboratory testing from those laboratories.

“Rooting out healthcare fraud is a priority in the District of South Carolina,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina in the release. “Kickbacks raise costs for taxpayers and undermine our healthcare programs by leading to unnecessary medical services. We are committed to holding those who give and receive illegal kickbacks accountable.”

The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorneys’ Offices for the Districts of South Carolina and New Jersey, with assistance from the Federal Bureau of Investigation, HHS-OIG and DCIS. The settlement was handled by Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section), Assistant U.S. Attorney Beth C. Warren for the District of South Carolina and Assistant U.S. Attorney Kruti Dharia for the District of New Jersey.