Labcorp Settles False Claims Act Allegations of Unnecessary Urine Drug Testing for $14.5 Million

By the Constantine Cannon Whistleblower Team

On July 15, the United States Attorney’s Office for the District of Massachusetts announced that Laboratory Corporation of America (Labcorp), a national diagnostic testing laboratory, 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 (UDT) to Medicare. [1]

What Coverage Did Medicare Offer for the Types of UDT Testing at Labcorp?

Labcorp offered clients a urine testing panel called “ToxAssure Comprehensive” that included “Presumptive” and “Definitive” testing. Presumptive UDT testing serves as an initial screening test to detect the presence or absence of certain drug classes based on established thresholds, while Definitive UDT testing identifies specific substances and their concentrations. Under Medicare’s reimbursement system, laboratory-based Presumptive UDT testing is paid at a flat rate regardless of the number of drug classes tested. Definitive UDT testing is reimbursed at a flat rate when it includes 22 or more drug classes.[2]

What Did Labcorp Admit and Accept Responsibility For?

According to the settlement, Labcorp admitted to and accepted responsibility for the following:

• • From Jan. 1, 2018, through Nov. 22, 2023, Labcorp routinely submitted claims to Medicare for Presumptive and Definitive UDT through its “ToxAssure Comprehensive” panel.
  • The ToxAssure Comprehensive panel combined Presumptive UDT for certain substances and direct-to-Definitive UDT (i.e., without first performing Presumptive testing) for other substances.
  • Labcorp regularly performed both types of testing on the same patient, using the same urine sample on the same date of service, and billed Medicare for both the all-inclusive Presumptive UDT and the highest-tier Definitive UDT each time it performed the ToxAssure Comprehensive panel.
  • For several substances, Labcorp performed Definitive testing without first performing Presumptive testing to determine whether Definitive testing was medically necessary.[3]

More About the Settlement

United States Attorney Leah B. Foley commented: “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.”[4]

Labcorp received credit under DOJ guidance for taking disclosure, cooperation, and remediation into account in False Claims Act cases. As part of the settlement, Labcorp said it ceased billing the CPT codes associated with Presumptive and Definitive UDT testing in the ToxAssure Comprehensive panel.

Whistleblowers Can Speak Up Against Healthcare Fraud

While it is not publicly known whether whistleblowers were involved in initiating this case, the government often relies on individuals to speak up with valuable information about fraud or misconduct.

Healthcare fraud can take many forms, including medical billing fraud, pharmaceutical fraud, laboratory fraud, violations of the Anti-Kickback Statute and Stark Law, and fraud against government healthcare programs – just to name a few.

Under the qui tam (or whistleblower provisions) of the False Claims Act, eligible whistleblowers can bring lawsuits on behalf of the government and may receive up to 30% of the government’s recovery on successful enforcement actions.

Our Firm Represents Healthcare Fraud Whistleblowers

According to Constantine Cannon Intake Partner Alysia Solow: “Healthcare fraud enforcement remains a top priority for the government, particularly when providers seek reimbursement for services that are not medically necessary. Our firm has extensive experience representing health care fraud whistleblowers under the False Claims Act.”

If you believe you have information about healthcare fraud or would like to learn more about our firm’s False Claims Act successes, please contact us. We will connect you with a member of the Constantine Cannon whistleblower team for a free and confidential consultation.

Speak Confidentially With Our Whistleblower Attorneys

[1] See https://www.justice.gov/usao-ma/pr/labcorp-agrees-pay-145-million-testing-fraud

[2] Id.

[3] Id.

[4] Id.

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