Thursday, December 17, 2015

Former Doctor and Non-Doctor Owners of Kentucky Clinical Laboratory Indicted for Health Care Fraud Due to Urine Drug Testing

Drug toxicology was considered a lucrative field in health care. Urine drug testing is important for physicians to monitor patient use of drugs and compliance especially with pain medications or addiction treatment.

There are now a number of fraud cases arising involving drug toxicology. In California, it has been a hot area in workers' compensation fraud. There are also Medicare, Medicaid, workers' compensation insurance and private insurance fraud investigations around the country relating to drug testing. 

On December 1, 2015 arraignment was held after a federal grand jury in Kentucky returned a 100-count indictment charging five men, who owned a clinical laboratory, with billing health care third-party payors for urine drug tests that were medically unnecessary and not eligible for reimbursement.

The Indictment charged Dr. Robin G. Peavler, Dr. Bryan S. Wood, Dr. Robert L. Bertram, James W. Bottom, and Brian C. Walters, all of Kentucky, with one count of conspiracy to commit health care fraud and 99 counts of health care fraud.  The alleged conduct was part of a scheme to defraud Medicare, Medicaid, Anthem BlueCross BlueShield, Bluegrass Family Health, and others.

This Indictment came after a false claims settlement in February 2014 for $15.7 million by two of the doctors, the lab PremierTox and the doctors' addiction recovery business. One of the issues in that case was that the physicians allegedly had an interest in the lab where there were referrals from the addiction treatment clinic who treated people addicted to opiates. There were also allegations of unnecessary tests in that regardless of the results of the first test, the protocol was to have a second test. There were also allegations of upcoding.

In the criminal case, the government alleges that beginning around December 2010, the named individuals (who are formers owners of a clinical lab PremierTox) agreed to collect thousands of urine samples for testing at PremierTox, which lacked the ability to perform quantitative drug tests on such a high volume of samples. 

PremierTox allegedly froze the samples, at a different lab in Kentucky, and didn’t perform the tests until up to ten months later, knowing that the results were no longer relevant to the treatment of the patients.  According to the Indictment, the former owners of PremierTox allegedly submitted claims to Medicare, Medicaid and private insurers, and were reimbursed thousands of dollars for these unnecessary tests.

An indictment is an allegation only.  All defendants are presumed innocent and are entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.

Doctors who order drug testing and make arrangements with the clinical labs need to ensure that there is medical necessity, be compliant with any arrangements with them and ensure that there are no hidden benefits. Similarly, clinical labs need to be compliant since this is an area of inquiry by the government and insurance carriers.

Posted by Tracy Green, Esq.


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