Labs In Court

Lab Uses Billing Info of Another Lab to Get Around Payment Restrictions

Case: In 2015, Kentucky Medicaid and private payors began having doubts about the legitimacy of urine drug test claims submitted by CAL Laboratory Services and restricted payments to the toxicology lab. Undeterred, the owner of CAL arranged with his counterpart at Tristate Medical Laboratories to have tests referred to and performed by CAL billed to health insurance programs using Tristate’s billing information to make it look like Tristate performed the tests. In exchange, he paid Tristate’s owner 40% of the $1.3 million in fraudulent reimbursements received on the tests.

Significance: Four principals of CAL and Tristate pleaded guilty to their role in the conspiracy. Two of the defendants died after being convicted; the other two are awaiting sentencing. In addition to fines and possible prison, the owner of Tristate is likely to get a 10-year Medicare and Medicaid exclusion.

 

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