Labs In Court

Texas Lab Loses $30.6 Million Whistleblower Suit over False Billing of Technician Travel Mileage

Case: A case that began as a whistleblower complaint by a competing lab ended with a $30.6 million judgment against a Texas lab for falsely billing Medicare for travel reimbursements. In addition to billing for miles ostensibly driven by technicians to collect specimens that were actually shipped via airplane without any technician onboard, the lab failed to prorate mileage, treating a single shipment of multiple samples as though each sample had been shipped separately.

Significance: The lab claimed that it followed guidance from the CMS Manual suggesting that it could bill for the mileage. But the federal appeals court wasn’t impressed. For one thing, CMS guidance isn’t legally binding, especially when it contradicts clear billing laws. Besides, the lab misread the guidance which applied to billing for mileage that technicians actually travelling somewhere, which wasn’t the situation in this case. The argument that it was a reasonable mistake to believe that it could bill for miles not travelled by anyone “borders on the absurd” [United States ex rel. Drummond v. BestCare Lab. Servs., L.L.C., 2020 U.S. App. LEXIS 4904].

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