06 October 2024 , 12:00
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An American toxicology company agreed to pay $27 million to settle allegations that it billed the country’s federal health insurance program with unnecessary urine drug tests.
Precision Diagnostics, a toxicology company that conducts laboratory urine drug testing nationwide, allegedly had physicians order excessive urine drug tests from 2013 to 2022 that were unnecessary in terms of assessing their patient’s health, the U.S. The Department of Justice (DOJ) said.
While the settlement makes clear the case is concluded and that there will be no determination of liability, the DOJ said that Precision’s conduct “violated federal health care program rules” that reimbursements will only be made for tests that “are reasonable and medically necessary.”
“The Justice Department is committed to ensuring that laboratory tests are ordered based on each patient’s medical needs and not just to increase laboratory profits,” said Principal Deputy Assistant Attorney General Brian M. Boynton. “We will not tolerate practices that unnecessarily increase the costs of federal health care programs and result in the misuse of taxpayer funds.”
Furthermore, prosecutors allege that the Precision provided “free items to physicians” who agreed to participate, thereby violating the country’s Anti-Kickback Statute, an act which prohibits labs from enticing physicians with anything of value in exchange for padding their bottom line.
“We aggressively pursue those who defraud these critical healthcare programs and take money meant for needy patients. Taxpayers deserve nothing less,” said U.S. Attorney Erek L. Barron.
Prosecutors became aware of Precision’s alleged conduct thanks to a whistleblower, who will be compensated with a little over $2.7 million for his services.
The DOJ did not immediately comment when asked how much Precision profited from its alleged 10-year-long urine drug testing scheme.
Of the $27 million settlement, $18.2 million will be returned to the federal government and the remainder will be allocated amongst the affected states’ health insurance programs.
Precision will also willingly participate in a Corporate Integrity Agreement with the U.S. Department of Health for five years.