Genova Diagnostics agreed in April 2020 to pay up to $43 million to settle a whistleblower lawsuit alleging that the Asheville, North Carolina laboratory billed Medicare, TRICARE, and other federal health programs for medically unnecessary tests. The Genova Diagnostics lawsuit was filed under the False Claims Act by the company’s former chief medical officer, who said Genova ignored his warnings about the clinical evidence behind three of its core test panels and fired him when he pushed the issue internally.1U.S. Department of Justice. Testing Laboratory Agrees to Pay $43 Million to Resolve Allegations of Medically Unnecessary Tests
Who Filed the Case
Dr. Darryl Landis, a board-certified physician, served as Genova’s chief medical officer from 2012 through 2017. His job included developing medical necessity evidence for three of the company’s flagship products: the IgG allergen panel, the NutrEval nutritional profile, and the GI Effects stool panel.2G2 Intelligence. Lab to Pay Up to $43 Million After Disregarding Employee’s False Billing Concerns3Mountain Xpress. Genova Diagnostics Settles Billing Fraud Claims for Up to $43M
After reviewing the literature, Landis concluded that the scientific support required to bill federal insurers for those tests did not exist. He told Genova to stop billing Medicare, TRICARE, and private insurers for them. He began raising concerns in July 2015, shortly after Blue Cross Blue Shield had stopped covering Genova’s stool tests as medically unnecessary.3Mountain Xpress. Genova Diagnostics Settles Billing Fraud Claims for Up to $43M
According to Landis, then-CEO Chris Smith called his position “overly conservative,” cut his department’s budget, and shut him out of leadership meetings. Landis alleged the company then fabricated misconduct charges to justify firing him.2G2 Intelligence. Lab to Pay Up to $43 Million After Disregarding Employee’s False Billing Concerns
After leaving, Landis filed a qui tam complaint in the U.S. District Court for the Western District of North Carolina (case number 1:17-cv-341). Qui tam provisions let a private whistleblower sue on behalf of the federal government and collect a share of any recovery. Named alongside Genova were its holding company GNVA Holdings, CEO Chris Smith, private equity owner Levine Leichtman Capital Partners, and two of the firm’s principals, Lauren Leichtman and Aaron Perlmutter.4Quackwatch. Genova Diagnostics Settles False Claims Act Violations
What the Government Alleged
The complaint set out four categories of conduct. First, Genova was alleged to have billed Medicare, TRICARE, and the federal employee health program for its IgG allergen, NutrEval, and GI Effects panels despite insufficient evidence that the tests were medically necessary or clinically valid for the purposes billed. Second, Genova allegedly used requisition forms that steered physicians toward ordering large bundled panels rather than picking tests appropriate to the individual patient. Third, the company was accused of classifying tests under incorrect billing codes to obtain reimbursement from Medicare and Medicaid. Fourth, payments Genova made to three phlebotomy vendors were alleged to violate the Stark Law, the federal physician self-referral prohibition.
Between July 2015 and June 2017 alone, the complaint alleged, Genova fraudulently obtained more than $21 million in Medicare reimbursements on top of Medicaid payments from North Carolina.4Quackwatch. Genova Diagnostics Settles False Claims Act Violations
Why the Tests Were the Problem
The IgG food antibody panel drew particular scrutiny. The American Academy of Allergy, Asthma & Immunology has stated that IgG food panel testing has never been scientifically proven to diagnose food sensitivities, and that the presence of food-specific IgG antibodies is a normal immune response to exposure that may actually indicate tolerance.5American Academy of Allergy, Asthma & Immunology. IgG Food Test
The Choosing Wisely initiative recommended against IgG testing as an unproven diagnostic as early as 2012, and the Canadian Society of Allergy and Clinical Immunology issued similar guidance.5American Academy of Allergy, Asthma & Immunology. IgG Food Test Peer-reviewed work has described food-specific IgG4 measurement as an unstandardized and unproven procedure with no reliable correlation to food allergy confirmed by controlled challenge.6National Institutes of Health, PubMed Central. Testing for IgG4 Against Foods Is Not Recommended as a Diagnostic Tool
How the $43 Million Settlement Works
The Department of Justice announced the settlement on April 27, 2020. It has two components.1U.S. Department of Justice. Testing Laboratory Agrees to Pay $43 Million to Resolve Allegations of Medically Unnecessary Tests
The first is an initial payment of roughly $17 million, which Genova satisfied by surrendering claim funds already being held in suspension by Medicare and TRICARE. The HHS Office of Inspector General records the figure as $17,400,737.7HHS Office of Inspector General. Genova Diagnostics, Inc. – Corporate Integrity Agreement
The second is contingent. Over the five years following the settlement, Genova was required to pay the government 13 percent of any net annual revenue above $100 million and 20 percent of any asset sales above $1 million, with those additional payments capped at $26 million.3Mountain Xpress. Genova Diagnostics Settles Billing Fraud Claims for Up to $43M
Landis, as the whistleblower, stood to receive up to roughly $6 million, or about 15 percent of the total recovery.3Mountain Xpress. Genova Diagnostics Settles Billing Fraud Claims for Up to $43M
As is standard in civil False Claims Act settlements, the agreement contained no formal determination of liability. The claims were resolved as allegations.1U.S. Department of Justice. Testing Laboratory Agrees to Pay $43 Million to Resolve Allegations of Medically Unnecessary Tests
The Compliance Obligations That Followed
Genova also signed a five-year Corporate Integrity Agreement with the HHS Office of Inspector General. It took effect April 17, 2020 and ran through June 24, 2025. The agreement required Genova to build and maintain a compliance program meeting federal specifications and to retain an independent review organization to audit claims. OIG records list the agreement’s status as closed, indicating Genova completed the five-year period.7HHS Office of Inspector General. Genova Diagnostics, Inc. – Corporate Integrity Agreement
Where Genova Stands Now
Genova continues to operate from its Asheville headquarters and reports serving clinicians in the United States, the United Kingdom, and internationally.8Genova Diagnostics. Genova Diagnostics In January 2026, the company announced the acquisition of Cell Science Systems, a Florida-based laboratory known for the Alcat Test, adding a second CLIA-certified lab alongside its Asheville and London facilities. The purchase price was not disclosed, and available information does not indicate whether the deal triggered contingent payment obligations under the DOJ settlement’s revenue and asset-sale thresholds.9Cell Science Systems. Genova Diagnostics Announces Acquisition of Cell Science Systems