Source: United States Department of Justice Criminal Division
Laboratory Corporation of America (Labcorp), a national clinical diagnostics company, has agreed to pay $14,500,000 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare Part B (Medicare) for medically unnecessary urine drug testing (UDT) for some patients conducted pursuant to a testing panel offered by Labcorp, called “Toxassure Comprehensive.”
“The government expects that any testing it pays for is medically necessary and not wasteful or structured in a way that maximizes billing opportunities for providers at the expense of the federal fisc,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We will continue to hold providers who do otherwise accountable.”
“Today’s settlement reflects my Office’s enduring commitment to combatting healthcare fraud and recovering taxpayer money. Labcorp’s conduct resulted in Medicare payouts for unnecessary tests,” said U.S. Attorney Leah B. Foley for the District of Massachusetts. “We will continue to hold accountable providers who engage in fraud, waste, and abuse.”
“Medicare beneficiaries and taxpayers should be able to trust that testing and billing practices are fair and appropriate,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General (HHS‑OIG). “Today’s settlement makes clear that when providers put profits before patients and ignore billing rules, we will act decisively to hold them accountable.”
Labcorp’s Toxassure Comprehensive panel contained both “Presumptive” and “Definitive” UDT methods. In general, Presumptive UDT detects the presence or absence of certain drug classes subject to certain testing thresholds while definitive UDT identifies individual substances and their concentrations, where applicable. Medicare payment for UDT is based on bundled payment rates associated with the Current Procedure Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes. In general, for laboratory-based Presumptive testing, Medicare pays a flat rate no matter the number of drug classes tested, pursuant to CPT code 80307, and for definitive testing Medicare pays a flat rate for 22 or more drug classes per HCPCS Code G0483.
As part of the settlement, Labcorp admitted, acknowledged, and accepted responsibility for the following facts:
- From Jan. 1, 2018, through Nov. 22, 2023, Labcorp routinely submitted claims for presumptive and definitive UDT to Medicare, some of which pursuant to a testing panel marketed by Labcorp as “ToxAssure Comprehensive.”
- ToxAssure Comprehensive consisted of a preselected combination of presumptive UDT for certain substances and direct to definitive UDT (i.e., with no prior presumptive test) for other substances.
- Labcorp ran many of these tests simultaneously for the same patient, on the same date of service, using the same urine sample, and billed Medicare with CPT Code 80307 for the presumptive UDT and HCPCS Code G0483 for the definitive UDT. In other words, Labcorp billed Medicare for both the all-inclusive presumptive CPT code and the highest-tier definitive HCPCS code each time the ToxAssure Comprehensive was performed.
- For several of the substances tested on a direct-to-definitive basis, a presumptive testing option existed but Labcorp performed its definitive tests without first performing a presumptive test to inform the necessity of definitive testing for that substance.
The United States alleged that the full ToxAssure Comprehensive panel billed as described above resulted in the submission of medically unnecessary claims to Medicare for some of the patients for whom it was performed. Labcorp also represented in the settlement agreement that it has ceased billing to Medicare the combination of codes 80307 and G0483 for beneficiaries testing using the ToxAssure Comprehensive panel. Labcorp has been credited in this settlement under the Department of Justice’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases, Justice Manual §4-4.112.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with HHS-OIG.
The investigation and resolution of this matter illustrate the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at www.oig.hhs.gov/fraud/report-fraud or 800-HHS-TIPS (800-447-8477).
This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division’s FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.
The matter was handled by Fraud Section Senior Counsel for Health Care Fraud Augustine Ripa and Assistant U.S. Attorney Abraham George for the District of Massachusetts. Investigative support was provided by HHS-OIG and the FBI.
The claims resolved by the settlement are allegations only and there has been no determination of liability.