Labs in Court

University of Miami Settles Lab Testing False Claim Charges for $22 Million

Case: In this particular case, “The U” stands for unnecessary, as in medically unnecessary lab tests billed to Medicare by the University of Miami’s lab and off campus hospital-based facilities. The $22 million that the UM has agreed to fork over settles a trio of whistleblower lawsuits filed in 2013 and 2014, alleging that UM and its affiliates:

  • Converted multiple physician offices to Off-Campus Hospital Facilities so it could bill Medicare for higher rates and without providing beneficiaries the required notice;
  • Used its electronic ordering system to automatically prompt physicians to order multiple medically unnecessary tests for kidney transplant patients
  • Submitted inflated claims for reimbursement for pre-transplant lab testing done by an affiliate that the affiliate should have billed for directly and then using the Medicare payments to pay the affiliate kickbacks for referring surgical patients.

Significance: The first takeaway of the settlement is to emphasize the importance of ensuring compliance with the Off-Campus billing of Medicare patients notice requirements. Such requirements count as conditions of payment and not complying with them can turn the claim into a false claim. The other moral of the UM story is that “standing” orders remain highly risky and are allowed only when strictly tailored to each patient’s individual circumstances and needs.

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