The settlement addresses claims that the company billed Medicare for simultaneous presumptive and definitive tests that were not medically necessary.
Laboratory Corporation of America (Labcorp) has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare for medically unnecessary urine drug testing. The settlement centers on a testing panel marketed by the company as “Toxassure Comprehensive.”
The US Department of Justice alleged that from Jan 1, 2018, through Nov 22, 2023, Labcorp routinely submitted claims for both presumptive and definitive urine drug testing for the same patient, on the same date of service, using the same urine sample. The “Toxassure Comprehensive” panel consisted of a preselected combination of these tests, and the company billed Medicare using both the all-inclusive presumptive code and the highest-tier definitive code each time the panel was performed.
“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,” says Brett A Shumate, assistant attorney general of the Department of Justice Civil Division, in a release. “We will continue to hold providers who do otherwise accountable.”
Billing and Testing Procedures
Presumptive urine drug testing detects the presence or absence of drug classes, while definitive testing identifies individual substances and their concentrations. Medicare payment for these tests is based on bundled rates associated with Current Procedure Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes.
For laboratory-based presumptive testing, Medicare pays a flat rate under CPT code 80307. For definitive testing, it pays a flat rate for 22 or more drug classes under HCPCS code G0483. The United States alleged that for several substances tested on a direct-to-definitive basis, a presumptive testing option existed, but Labcorp performed definitive tests without first performing a presumptive test to determine if the more expensive testing was necessary.
“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,” says Leah B Foley, US attorney for the District of Massachusetts, in a release.
Terms of the Settlement
As part of the agreement, Labcorp admitted and accepted responsibility for certain facts, including that it billed Medicare for both CPT code 80307 and HCPCS code G0483 simultaneously when using the Toxassure Comprehensive panel. The company also represented that it has ceased billing this combination of codes to Medicare for beneficiaries tested with that specific panel.
The Department of Justice credited Labcorp for its disclosure, cooperation, and remediation during the investigation. The resolution was a coordinated effort between the Civil Division, the US Attorney’s Office for the District of Massachusetts, and the Department of Health and Human Services Office of Inspector General (HHS-OIG).
“Medicare beneficiaries and taxpayers should be able to trust that testing and billing practices are fair and appropriate,” says Miranda L Bennett, acting deputy inspector general for investigations of the HHS-OIG, in a release. “Today’s settlement makes clear that when providers put profits before patients and ignore billing rules, we will act decisively to hold them accountable.”
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
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