Laboratory Corporation of America, known as Labcorp, has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting medically unnecessary claims for urine drug testing to Medicare for payment, according to a July 15 announcement.
Labcorp offered a testing panel called “Toxassure Comprehensive,” which included both Presumptive and Definitive urine drug tests. The company admitted that from Jan. 1, 2018 through Nov. 22, 2023, it routinely submitted claims to Medicare for both types of tests—sometimes on the same patient and date using the same sample—and billed with codes CPT 80307 and HCPCS G0483 each time it performed the ToxAssure Comprehensive panel. For several substances tested directly with Definitive methods, a Presumptive option existed but was not used first.
The government alleges this conduct led Labcorp to bill Medicare for medically unnecessary tests. United States Attorney Leah B. Foley said, “Today’s settlement reflects my Office’s enduring commitment to combatting healthcare fraud and recovering taxpayer money. Labcorp’s conduct resulted in Medicare payouts for unnecessary tests. We will continue to hold accountable providers who engage in fraud, waste, and abuse.” Assistant Attorney General Brett A. Shumate added, “The government expects that any testing it pays for is medically necessary and not wasteful or structured in a way that maximizes billing opportunities for providers at the expense of the federal fisc.”
Acting Deputy Inspector General Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General said, “Medicare beneficiaries and taxpayers should be able to trust that testing and billing practices are fair and appropriate… when providers put profits before patients and ignore billing rules, we will act decisively to hold them accountable.”
As part of the settlement agreement, Labcorp represented that it has stopped billing this combination of codes for urine drug testing using its ToxAssure Comprehensive panel. The company received credit under Department of Justice guidelines regarding disclosure, cooperation, and remediation in False Claims Act cases.
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