Quest Di­ag­nos­tics agrees to pay $241 mil­lion in Med­i­caid case

Modern Healthcare - - Late News -

Quest Di­ag­nos­tics com­pleted agree­ments to pay a record $241 mil­lion to set­tle long-run­ning al­le­ga­tions that it bilked Cal­i­for­nia’s Med­i­caid pro­gram by over­charg­ing the state for lab­o­ra­tory test­ing ser­vices and pay­ing kick­backs to doc­tors in ex­change for pa­tient re­fer­rals. Quest, Madi­son, N.J., de­nies the al­le­ga­tions and says the con­tro­versy amounts to a dif­fer­ence of in­ter­pre­ta­tions of a Cal­i­for­nia law that says com­pa­nies must of­fer the state Med­i­caid pro­gram, Medi-Cal, com­pa­ra­ble rates to sim­i­lar pay­ers. In a news re­lease, the com­pany said it paid the record-set­ting amount be­cause the state’s in­ter­pre­ta­tions of the law cre­ated un­cer­tainty and “an in­tol­er­a­ble busi­ness en­vi­ron­ment.” A com­pet­ing lab­o­ra­tory filed a claim un­der Cal­i­for­nia’s False Claims Act in 2005 al­leg­ing that Quest of­fered physi­cians lower prices on some ser­vices in ex­change for re­fer­rals of Medi-Cal pa­tients, who could be billed for higher prices. State of­fi­cials later joined the law­suit against the state’s largest lab­o­ra­tory ser­vices provider and will re­ceive $171 mil­lion of the set­tle­ment pay­ment. Cal­i­for­nia reg­u­la­tors have sim­i­lar law­suits pend­ing against four other com­pa­nies, in­clud­ing Lab­o­ra­tory Corp. of Amer­ica, the state’s sec­ond­largest provider of lab ser­vices, whose trial is set for next year, ac­cord­ing to a news re­lease.

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