Lexington Laboratory Agrees to Pay $2.1 Million to Resolve Allegations of False Claims for Urine

Lexington Laboratory Agrees to Pay $2.1 Million to Resolve Allegations of False Claims for Urine Drug Testing Services


LEXINGTON, Ky. – LabTox, LLC, a clinical laboratory in Lexington, has agreed to pay $2,101,335 to resolve civil allegations that it violated the False Claims Act, a federal law that prohibits submitting false or fraudulent claims to the federal government.

The allegations relate to urine drug testing services LabTox provided to Medicare and Kentucky Medicaid beneficiaries. According to the settlement agreement, from January 2014 to March 2015, LabTox billed Medicare and Kentucky Medicaid for qualitative urine drug screens completed by a high complexity method. The United States alleged that these claims were false because LabTox misrepresented the complexity of its testing method: the method was actually low complexity, not high complexity, as LabTox claimed. By billing the screens as high complexity, LabTox secured higher reimbursements to which it was not entitled.

The United States further alleged that LabTox billed Medicare for specimen validity testing, a quality control process used to analyze a urine specimen to ensure that it has not been diluted or adulterated. Since January 2014, Medicare’s guidance has been explicit that specimen validity testing should not be separately billed to Medicare. The United States alleged that LabTox nonetheless submitted claims to Medicare for specimen validity testing during the period January 2014 to February 2016.

“Millions of Americans count on the medical benefits they receive from the Medicare and Medicaid programs,” said Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky. “Ensuring that improper billing practices and payments do not deplete the limited resources available to these health care programs is absolutely critical. We will continue to combat inappropriate billing of claims and endeavor to protect the critical resources of these taxpayer-funded programs. That truly benefits us all.”

Read more: https://www.justice.gov/usao-edky/pr/lexington-laboratory-agrees-pay-21-million-resolve-allegations-false-claims-urine-drug