Home 5 News 5 Clinical Lab Pays Big to Settle UDT False Claims Allegations in NC

Clinical Lab Pays Big to Settle UDT False Claims Allegations in NC

by | Oct 12, 2022 | News, Open Content

In this week’s enforcement roundup, Radeas reaches a settlement with the State of North Carolina after alleged improper billing.

A clinical lab company that had already settled false claims allegations regarding urine drug testing (UDT) for $11.6 million will now pay just over $3.6 million to settle similar claims in the state of North Carolina.

According to an Oct. 3 announcement from the North Carolina Attorney General’s Office, the settlement resolves allegations that the company, Radeas LLC, allowed healthcare providers to order presumptive and definitive UDTs at the same time. “A presumptive drug test detects the general presence of a substance and a definitive drug test determines the precise amounts of a substance,” explains the Attorney General’s Office in a statement. The North Carolina-based company then allegedly ran both tests at the same time.

The problem is that definitive drug tests are usually run sometime after the presumptive drug test has been performed as the results of the presumptive test determine whether a more expensive definitive drug test is necessary. Therefore, running both tests simultaneously “is not medically necessary” the Attorney General’s Office states, meaning that Radeas allegedly billed the North Carolina Medicaid program and received Medicaid funds “that it was not entitled to.”

The company also failed to provide the proper supporting documentation for the tests, the Attorney General’s Office alleges.1

In other enforcement actions involving the healthcare industry last week:

Oct. 3: A Massachusetts adult day health (ADH) provider settled allegations of improper billing relating to COVID-19 retainer payments for $386,861. Such “additional rate provisions” were provided to ADH facilities at the beginning of the pandemic to ensure they “did not go out of business,” according to the Massachusetts Office of the Attorney General. However, an investigation found that the provider, Active Day of Lowell, allegedly “billed for retainer payments for members at a much higher frequency than the member had been scheduled to attend Active Day of Lowell prior to the COVID-19 pandemic, in violation of MassHealth rate provisions.”2

Oct. 5: In another case involving medically unnecessary UDTs, pain management company Physicians Group Services, P.A., (PGS) settled healthcare fraud allegations for $700,000. In PGS’s case, the allegations relate to billing the Florida Medicaid Program for quantitative UDTs that the US and State of Florida deemed unnecessary “because the testing was not individualized to the particular needs of the patient,” according to the U.S. Department of Justice (DOJ).3

Oct. 6: The owner and operator of several durable medical equipment (DME) companies was sentenced to 30 months in prison and ordered to repay $7.5 million for his role in a healthcare fraud scheme. Jamie McCoy, 42, who either owned or operated DME Device Co., Patriot Medical Supply, and AE Wellness LLC, pleaded guilty to three felony counts in November 2020, including: “health care fraud, making false statements related to health care matters[,] and offering and paying illegal kickbacks for referrals,” the DOJ said in a statement. According to the DOJ, the scheme involved ads for free orthotic braces; marketing companies who sent patient information to a telemedicine doctor to sign off on the DME, despite often not even interacting with the patient; and kickbacks for such patient “leads.” McCoy then falsely billed TRICARE, Medicaid, and Medicare for the DME.4

References:

  1. https://oig.hhs.gov/fraud/enforcement/attorney-general-josh-stein-reaches-36-million-medicaid-settlement-with-radeas/
  2. https://www.mass.gov/news/lowell-adult-day-health-provider-resolves-allegations-of-overbilling-masshealth-for-covid-19-payments
  3. https://www.justice.gov/usao-mdfl/pr/jacksonville-health-care-provider-physicians-group-services-agrees-pay-700000-resolve
  4. https://www.justice.gov/usao-edmo/pr/jackson-man-sentenced-30-months-ordered-repay-75-million-health-care-fraud-scheme