On November 6, 2026, the U.S. Attorney’s Office for the District of New Jersey announced that Quest Diagnostics, Inc. agreed to pay over $13 million to resolve allegations that it violated the False Claims Act (FCA) and Anti-Kickback Statute (AKS) by offering valuable entertainment to induce laboratory referrals.
The government alleged that, over a period of nine years, Quest provided account decisionmakers free access to New York Giants suites and other events. Quest allegedly targeted high-value accounts, tied invitations to sales goals shared with senior management, and measured return on investment by comparing revenue before and after events.
The settlement arose from a qui tam (whistleblower) lawsuit filed in the District of New Jersey by several Relators including two physicians. The relators will receive $2,472,769. In addition to the monetary component, Quest also agreed to a five-year corporate integrity agreement (CIA), which requires independent review of Quest’s remuneration risk assessments and audits.
Hospitality Becomes Risky When Tied to Referrals and Revenue
The notable feature is the alleged evidence connecting entertainment to business generation. Selecting individuals who could steer referrals, tying invitations to sales goals, and tracking revenue-based ROI supplied a roadmap for alleging unlawful intent. Internal sales records can become central AKS evidence even when an event also serves a branding purpose.
Healthcare companies should preapprove high-value hospitality, use neutral attendee criteria, value benefits to invitees and guests, and maintain a recipient log. Reviews should test whether invitations correlate with referral authority, sales targets, account value, or anticipated revenue. The corporate integrity agreement shows that these controls may face independent review.
GWB represents laboratories and other healthcare organizations in connection with government investigations, AKS compliance, and False Claims Act litigation. If you need assistance reviewing a hospitality program or responding to an investigation, contact us today.
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