Quest Diagnostics agrees to pay $241 million in Medicaid case
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.