Lab com­pany set­tles fraud case for $256 mil­lion

Modern Healthcare - - REGIONAL NEWS - —Lisa Schencker

Mil­len­nium Health, a San Diegob­ased med­i­cal lab com­pany, will pay the gov­ern­ment $256 mil­lion to set­tle al­le­ga­tions it billed the gov­ern­ment for med­i­cally un­nec­es­sary urine, drug and ge­netic test­ing and gave free tests to

physi­cians in ex­change for re­fer­rals.

The U.S. Jus­tice Depart­ment’s an­nounce­ment of the set­tle­ment last week came af­ter the com­pany had reached agree­ment with its eq­uity hold­ers, the CMS, and Jus­tice on terms of a plan to fi­nan­cially re­struc­ture the com­pany. Mil­len­nium CEO Brock Har­d­away said the agree­ment would help the firm re­duce its debt and pay the set­tle­ment. The agree­ment al­lows Mil­len­nium to re­struc­ture through a Chap­ter 11 bank­ruptcy pro­ceed­ing or out­side of court.

The gov­ern­ment al­leged Mil­len­nium prompted doc­tors to or­der ex­ces­sive num­bers of urine drug tests with­out in­di­vid­u­al­ized as­sess­ments of pa­tients. It claimed Mil­len­nium gave free urine drug-test­ing cups to doc­tors on the con­di­tion that the physi­cians re­turned the urine to Mil­len­nium for hun­dreds of dol­lars of ad­di­tional test­ing, in vi­o­la­tion of the Stark law and the Anti-Kick­back Law. Mil­len­nium also sub­mit­ted false claims to fed­eral pro­grams for ge­netic test­ing per­formed with­out in­di­vid­u­al­ized as­sess­ments of need, the gov­ern­ment al­leged.

Clin­ton Mikel, a part­ner with Health Law Part­ners, called the set­tle­ment one of the larger ones he’s seen be­yond those with phar­ma­ceu­ti­cal and med­i­cal-de­vice com­pa­nies. “It will send a mes­sage cer­tainly,” Mikel said. “The gov­ern­ment is crack­ing down on labs.”

An­other lab com­pany, Health Di­ag­nos­tic Lab­o­ra­tory, re­cently filed for bank­ruptcy af­ter agree­ing to pay nearly $50 mil­lion to re­solve al­le­ga­tions that it im­prop­erly paid doc­tors for blood sam­ples. The firm de­nied wrong­do­ing.

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