Millennium
Health, formerly Millennium Laboratories, has agreed to pay $256 million to
resolve alleged violations of the False Claims Act for billing Medicare,
Medicaid and other federal health care programs for medically unnecessary urine
drug and genetic testing and for providing free items to physicians who agreed
to refer expensive laboratory testing business to Millennium.
The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs.
The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing — violated the Stark Law and the Anti-Kickback Statute. The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.
Millennium,
headquartered in San Diego, is one of the largest urine drug testing laboratories
in the United States and conducts business nationwide.
As
part of today’s announced settlements, Millennium has agreed to pay $227
million to resolve False Claims Act allegations, detailed in a complaint filed
by the United States, that Millennium systematically billed federal health care
programs for excessive and unnecessary urine drug testing from Jan. 1, 2008,
through May 20, 2015.
This
practice allegedly violated federal healthcare program rules limiting payment
to services that are reasonable and medically necessary for the treatment and
diagnosis of an individual patient’s illness or injury.
Millennium
has also agreed to pay $10 million to resolve False Claims Act allegations that
it submitted false claims to federal health care programs from Jan. 1, 2012,
through May 20, 2015, for genetic testing that was performed routinely and
without an individualized assessment of need.
In
connection with the False Claims Act settlements, Millennium has also entered
into a corporate integrity agreement (CIA) with the Department of Health and
Human Services-Office of Inspector General (HHS-OIG). In addition,
Millennium will pay $19.2 million to the Centers for Medicare and Medicaid
Services (CMS) to resolve certain administrative actions related to
Millennium’s urine drug test billing practices.
Millennium
agreed to make significant changes to its board of directors, and most of the
board will be comprised of new independent members. Under the five-year
CIA, OIG will monitor the company’s compliance efforts under this new
leadership.
The
False Claims Act allegations resolved were originally brought in lawsuits filed
by whistleblowers under the qui tam provisions of the False Claims Act,
which allow private parties to bring suit on behalf of the government and to
share in any recovery.
Under
the act, the United States can elect to intervene in an action filed by a
whistleblower, as it did, in part, with respect to several of the qui tam actions
regarding urine drug testing allegations. The whistleblowers will receive
$30.35 million from the False Claims Act recovery for the urine drug testing
claims and $1.48 million from the False Claims Act recovery for the genetic testing claims.
The Justice Department issued statements indicating that it “will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”
Attorney Commentary: The type of custom order lab panels that a large laboratory such as Millenium used for physicians were followed by many medium sized and smaller labs.
This is a warning to other laboratories out there to review the custom panels and providing items that previously were considered de minimus (test cups). Laboratories have been known to provide personnel to help gather specimens and this would also be a subject of scrutiny in the future.
Posted by Tracy Green, Esq.
Office: 213-233-2260
Green and Associates Attorneys at Law
Posted by Tracy Green, Esq.
Office: 213-233-2260
Green and Associates Attorneys at Law
