By Kelly A. Briganti, Editorial Director, G2 Intelligence
Seeking a fresh start, Millennium Health (San Diego, Calif.) announced it has agreed to pay three different settlement amounts and is entering into a corporate integrity agreement with the Department of Justice to resolve False Claims Act and Anti-kickback allegations. The government’s claims alleged the laboratory company billed Medicare, Medicaid and federal programs for unnecessary urine drug and genetic testing and provided free items to physicians to encourage referral of services to the laboratory. The $256 million settlement breaks out as follows:
- $227 million settling False Claims allegations of unnecessary urine drug testing between Jan. 1, 2008 and May 20, 2015 through use of custom profiles and standing orders rather than individualized assessment of patient testing needs. The allegations also included claims that free point of care testing (POCT) cups were provided to physicians in exchange for referral of urine specimens to the laboratory in violation of the Anti-kickback statute and Stark Law. The POCT claims were also the subject of private litigation alleging unfair competition brought by competitor Ameritox. (See “Federal Appeals Court Rebuffed Unfair Competition Claims But Didn’t Decide Stark, AKS Liability,” G2 Compliance Advisor, Sept. 2015, p. 4)
- $10 million for False Claims allegations relating to genetic testing between Jan. 1, 2012 and May 20, 2015. The government claimed genetic tests were routinely performed without regard to individualized need assessment.
- $19.2 million to Centers for Medicare and Medicaid Services with regard to urine drug test billing.
“We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs,” said the Department of Justice’s civil division head, Principal Deputy Assistant Attorney General Benjamin C. Mizer, in a statement announcing the settlement.
The settlement of the claims, however, involves no determination of liability and Millennium issued a statement in which its Chief Executive Officer Brock Hardaway indicated the company “may debate some of the merits of the DOJ’s allegations” but “respect[s] the government’s role in health care oversight and enforcement” and sought to “bring closure to an investigation that began nearly four years ago.” Hardaway also stressed the company is a “very different organization” than in the past. Indeed, the DOJ statement acknowledges the company has overhauled its board of directors with mostly new independent members. The company also indicated intentions to pursue restructuring.