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Urine Drug Testing Laboratory Fraud

On October 19, 2015, the United States Department of Justice announced that Millennium Health, formerly Millennium Laboratories, had agreed to pay $256 million to resolve allegations of Medicare fraud in connection with urine drug testing and genetic testing.

Millennium is a nationwide company engaged in the lucrative and highly competitive business of urine drug testing and genetic testing. The extremely competitive nature of this business prompts many unscrupulous players to engage in illegal activities to generate business. The recent $256 million settlement highlights some of the activities that take place in this industry

Kickbacks to Doctors. Referrals are the lifeblood for any laboratory testing company. Laboratories hire salespeople, usually known as “Reps” to visit doctors’ offices to persuade doctors to use their laboratory rather than competitor laboratories. The more referrals the Rep generates, the money the Rep makes and the more money the laboratory makes.

This leads to an incentive for the Rep and the laboratory to offer kickbacks to the doctor. The situation is even worse when multiple laboratories are offering kickbacks to the same doctor.

Some kickbacks are blatant, like free, virtually untraceable gift cards in exchange for every referral. Other laboratories might offer the doctor free point-of-care testing cups. These are small cups used to do a preliminary screening in the doctor’s office, which the doctor must purchase on his or her own. The quid pro quo works as follows: if you keep using my lab, you’ll never have to pay for point-of-care cups again. This is a kickback.

Other labs might offer free computer software or free patient tracking software under the guise that the doctor is merely “testing” the software for the lab. In reality, the lab is simply giving the doctor something of value that the doctor would otherwise have to pay for on his or her own.

Excessive Testing. Once a kickback relationship is established, the doctor often loses his or her objectivity in ordering tests. The doctor gets a kickback for every test. The more tests, the more kickbacks.

This frequently results in the doctor ordering more tests than are medically necessary.

Nobody objects, not even the patient. Patients rarely pay co-pays for urine drug tests so the patient has no incentive to complain about the large number of tests being ordered.

At the end of the day, the taxpayers pay the bill for all of these unnecessary tests.

The allegations in the Millennium case involved some of the above activity. However, Millennium is by no means the only player in the laboratory business engaged in this type of illegal conduct.

The complete Department of Justice press release can be found by clicking here.

If you know about illegal kickbacks, excessive testing, or other fraud in connection with laboratory drug testing, contact our attorneys for a free consultation at (877) 915-4040.

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