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Arkansas pathology lab, owners to pay $30M to settle kickback allegations

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Arkansas pathology lab, owners to pay M to settle kickback allegations


A North Little Rock pathology lab and several of its current and former owners are paying $30 million to settle federal allegations that the company used unlawful kickbacks and ordered testing that wasn’t medically necessary.

Advanced Pathology Solutions PLLC, formerly known as Advanced Pathology Solutions LLC, and its management services organization, APS MSO LLC — together referred to as APS — agreed to the settlement with the United States. The agreement also includes current and former owners Kevin Hannah, Donell Burkett and Daniel Hunter Pledger.

“Healthcare referrals must be based on the best decision for patients, not the influence of kickbacks,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “This settlement demonstrates the Department’s commitment to hold accountable both corporations and individuals who profit from improper kickback arrangements and who burden federal healthcare programs with claims for medically unnecessary services.”

The settlement resolves allegations laid out in a federal complaint filed April 8 in the U.S. District Court for the Eastern District of Arkansas. The United States alleged that from 2015 through July 2022, APS and its owners violated the False Claims Act by providing unlawful kickbacks to gastroenterology practices to induce referrals of pathology testing to APS, resulting in false claims to federal health care programs.

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According to the complaint, APS and its owners developed a business model that involved setting up and managing limited-purpose laboratories — known as “lean labs” — inside gastroenterology practices nationwide. Those practices could bill for preparing and staining biopsy specimen slides, while the slides were then shipped to APS’s lab in North Little Rock for pathologist interpretation and review. Federal officials alleged that in exchange for various benefits furnished by APS, the gastroenterology practices agreed to exclusively refer their patients to APS, creating improper financial relationships that amounted to kickbacks.

“Fraud against the taxpayer is rampant and insidious and when discovered must be held accountable. Engineering kickbacks to result in unnecessary medical testing which is then paid for by the United States taxpayer is unacceptable and once discovered as with APS, will result in lengthy investigation and review, and ultimately a significant settlement amount as demonstrated by this settlement,” said U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas. “Our office will continue to work with Main Justice to detect and deter any similar schemes and then hold the wrongdoers accountable under the law.”

The United States also alleged APS and its owners submitted — and caused the submission of — claims to federal health care programs for unnecessary testing. Specifically, the government said APS directed lean lab personnel to automatically order certain special tests, called “special stains,” before a pathologist reviewed a routine test, a hematoxylin and eosin stain, to determine whether additional testing was needed. The complaint alleged the protocol led to special stains that were not medically reasonable and necessary and were ineligible for Medicare coverage or reimbursement. In many cases, the government said APS also ordered additional “confirmatory” immunohistochemical testing that was not medically necessary.

“Kickbacks and medically unnecessary testing don’t just violate the law — they endanger patients and drain critical federal health care funds,” said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General. “Schemes like this erode trust in the health care system and divert resources away from those who truly need care. HHSOIG will move swiftly and aggressively with our law enforcement partners to uncover these abuses and hold every responsible party accountable.”

In addition to the allegations in the April 8 complaint, the settlement also resolves claims that from Nov. 1, 2018, to Nov. 30, 2020, APS and CEO Kevin Hannah knowingly and willfully provided unlawful kickbacks to Richard Sorgnard through volume-based commission payments to induce referrals for epidermal nerve fiber density testing. The United States contends APS paid Sorgnard 4% of all payments APS collected for ENFD testing he referred, and that the arrangement violated the Anti-Kickback Statute and resulted in false claims under the False Claims Act. Sorgnard previously entered into a settlement with the government to resolve related claims.

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“Any entity that participates in health care and reaps illicit profits by taking advantage of and violating the trust given by Medicare and Medicaid programs must be held accountable,” said U.S. Attorney Troy Rivetti for the Western District of Pennsylvania. “This settlement is notice that such illegal conduct simply will not be tolerated.”

As part of the resolution, APS entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General. The agreement requires APS to implement auditing and accountability provisions, including a compliance program, training and education requirements, and a review of physician referral relationships.

The complaint followed three lawsuits originally filed under the whistleblower provisions of the False Claims Act, which allows private parties to sue on behalf of the United States and potentially receive a portion of the recovery. The consolidated cases are United States ex rel. Watkins v. Advanced Pathology Solutions, No. 4:20-cv-1110 (E.D. Ark.); United States ex rel. Aucoin v. Advanced Pathology Solutions, No. 4:21-cv-277 (E.D. Ark.); and United States ex rel. Paulsen v. Advanced Pathology Solutions, LLC, No. 3:22-cv-00652-JPG (E.D. Ark.).

The settlement comes after a $4.75 million settlement reached earlier this year with Atlanta Gastroenterology Associates, a former APS client.

The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Arkansas are handling the matter, along with the U.S. Attorney’s Office for the Western District of Pennsylvania. The matter was handled by Fraud Section attorneys Evan Ballan, Jeff McSorley and Kelley Hauser, Assistant U.S. Attorney Jamie Goss Dempsey for the Eastern District of Arkansas, and Assistant U.S. Attorney Paul Skirtich for the Western District of Pennsylvania.

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Officials also pointed to broader federal efforts to combat health care fraud, noting that tips about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).



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ARKANSAS A-Z: Band formed by faculty members of what is now UCA | Arkansas Democrat Gazette

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ARKANSAS A-Z: Band formed by faculty members of what is now UCA | Arkansas Democrat Gazette


Five science professors formed the Professors, a bluegrass/folk band that performed for 44 years, beginning in 1967 when Arkansas State Teachers College in Conway was transitioning to State College of Arkansas, precursor of the University of Central Arkansas.

The band brought to life the “Friendliest College in Arkansas” slogan of the campus during those years, with shows that included a healthy dose of fun and humor along with the folk and bluegrass. One student remarked, “I think they are funny. I enjoy hearing them, because they enjoy themselves … . I didn’t know science professors can have so much fun.” They performed all over the state at fundraising events, football games, Kiwanis meetings and ceremonies, as well as at Conway’s first Toad Suck Daze in 1982. All of the band’s members were born and raised in rural Arkansas.

Ralva Bass, professor of physics, taught both physics and math at ASTC and was from Butlerville. Bass served in World War II and taught high school math in Newport in Jackson County before arriving at ASTC in 1958. He served for one year as interim chair of physics in 1964, and he coached the bowling team on campus. Bass played the rhythm guitar in the band.

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Neal Buffaloe, professor and chair of biology, was born in Leachville; he was an author and a minister and began at ASTC in 1957. His service to the campus was honored by two former students, who established the Neal D. Buffaloe Laboratory for Science Education in the Lewis Science Center. Buffaloe, who had formal training in music and played the viola for UCA’s Little Symphony Orchestra, played fiddle in the band.

Bluegrass band the Professors in front of Main Hall at the University of Central Arkansas in Conway, where the band members taught science: (Left to right): Denver Prince, Neal Buffaloe, Faril Simpson, Ralva Bass and Jerry Manion. (Courtesy of Dr. Robert Mauldin)

 

Jerry Manion, professor and chair of chemistry, was from Beebe, where he was the 1958 high school valedictorian; he started work at ASTC in 1965 and remained employed at UCA until his death in 2014. In 1965, Manion began practicing with the band in one of the chemistry labs or the radioisotope laboratory in Lewis Science Center. Playing the banjo, the guitar and some mandolin as well as singing tenor vocals, Manion became the leader and chief humorist of the band. He also played with the UCA Dixieland Band for more than 35 years.

Denver Prince, professor and chair of physics, was from Magnet Cove. Prince taught high school math, chemistry and physics before joining ASTC’s faculty in 1959. Prince was a strong supporter of UCA athletics, and the Prince Center on UCA’s campus was named in his honor. Prince played the upright bass, but in the early days of the band, it was a washtub bass. Prince helped on chorus as well.

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Faril Simpson of Grant County began at ASTC as a professor of chemistry in 1958. He had previously served in World War II and taught at Hall High School in Little Rock. He served as interim chair of chemistry at ASTC in 1964. A lover of old folk music and gospel songs, Simpson had a beautiful, deep voice, and provided lead vocals. He also played rhythm guitar and harmonica.

Under the recording label Wildfire Records, the Professors recorded two albums: “Introducing the Professors” (1972) and “Remember Me” (1985). In addition, they recorded the singles “Salty Dog Blues” (1971), “When It’s Time for the Whippoorwill to Sing” (1971), “Weeds in the Tater Patch” (1972), “Gonna Lay It By” (1972), “Faulkner County” (1973) and “Arkansas Hornpipe” (1973). — Robert Mauldin

This story is taken from the online Encyclopedia of Arkansas, a project of the Central Arkansas Library System. Visit the site at encyclopediaofarkansas.net.



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Office of Keep Arkansas Beautiful Now Part of the ARDOT

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Office of Keep Arkansas Beautiful Now Part of the ARDOT


The Arkansas Department of Transportation is now the home of the Office of Keep Arkansas Beautiful following the passage of Act 148 of the 2026 Fiscal Session.

The act, sponsored by Sen. Mark Johnson (R-Little Rock), transferred the duties and responsibilities of the Keep Arkansas Beautiful Commission to the new Office of Keep Arkansas Beautiful within ARDOT. The Keep Arkansas Beautiful Commission had previously operated under the Department of Parks, Heritage and Tourism.

This transition brings Keep Arkansas Beautiful’s community-focused programs under the same roof as ARDOT. According to a press release, working together as one organization will create new opportunities to align litter prevention and beautification efforts along the State’s Highway System.

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“This partnership creates opportunities to think beyond litter,” McKenzie McMath Coronel, administrator of the Office of Keep Arkansas Beautiful, said. “Together, we can build on that work by enhancing the beauty of Arkansas through roadside wildflowers, scenic byways, community beautification, and other initiatives that make our highways and public spaces places people are proud of.”

READ ALSO: NPC Highlights Workforce Partnerships During Visit From U.S. Education Leaders



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Freshman OL Tucker Young never wavered through Arkansas football coaching changes | Whole Hog Sports

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Freshman OL Tucker Young never wavered through Arkansas football coaching changes | Whole Hog Sports





Freshman OL Tucker Young never wavered through Arkansas football coaching changes | Whole Hog Sports







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