Orchard Laboratories Corporation agreed to pay $6,494,290.00 to resolve allegations that it violated the False Claims Act, according to a July 29 announcement by United States Attorney Jerome F. Gorgon Jr.
Gorgon was joined in the announcement by Jennifer Runyan, Special Agent in Charge of the Federal Bureau of Investigation Detroit Division, and Thomas Ethridge, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General. The settlement addresses claims that Orchard billed Medicare for over-the-counter COVID-19 tests that were never delivered between March 1 and May 11, 2023.
From April 4, 2022 through May 11, 2023, Medicare covered up to eight over-the-counter COVID tests per month for eligible beneficiaries who requested them from authorized providers such as physicians, pharmacies or laboratories. Orchard participated in this program as a clinical reference laboratory. The investigation began after complaints alleged improper billing for tests not requested or received by beneficiaries.
“The False Claims Act is an important tool to combat fraudulent medical billing,” said U.S. Attorney Jerome F. Gorgon Jr. for the Eastern District of Michigan, said U.S. Attorney Jerome F. Gorgon Jr. for the Eastern District of Michigan. “Our office is coming for healthcare providers who cheat the government.”
“Today’s settlement reinforces our steadfast commitment to protecting the integrity of federal health care programs and ensuring accountability when violations occur,” said Special Agent in Charge Thomas Ethridge of HHS-OIG. “We remain dedicated to safeguarding taxpayer dollars, and we will continue to work with our law enforcement partners to uphold the trust placed in us by the public.”
The matter was handled by Assistant United States Attorneys John Postulka and Gregory Dickinson from the U.S. Attorney’s Office for the Eastern District of Michigan with coordinated efforts among federal agencies including FBI Detroit and HHS-OIG.
On April 7, the Department of Justice announced creation of its National Fraud Enforcement Division focused on investigating fraud against federal benefit programs as part of President Trump’s Task Force to Eliminate Fraud chaired by Vice President J.D. Vance.
The resolved claims are allegations only; there has been no determination of liability.