The increased requirement of urine monitoring for pain management and drug addiction treatment resulted in companies and providers being more aggressive about the ordering of urine screenings. A recent case shows that qui tam relators are also filing actions against toxicology labs and the doctors who order the screeenings. At the heart of the case is the business relationships between the labs and referring providers.
Referral arrangements between ordering physicians and the laboratories are an issue. I expect to see many more qui tam lawsuits, civil lawsuits by insurance carriers and even some criminal prosecutions.
Understand that the government views providing free point of care testing cups is proving to be an illegal inducement. It also views ownership of any referring provider in the laboratory or a related entity which received profits from the urine tox referrals is also an illegal inducement. Labs and its marketing companies are coming up with creative ways to get referring physicians and drug treatment clinics, but be careful since this could be your company 3 years from now. A company like PremierTox can afford to pay millions but individuals tend to get more aggressive treatment (criminal allegations).
On February 10, 2016, PremierTox 2.0, Inc. paid $2.5 million to resolve alleged violations of the False Claims Act. PremierTox previously did business in Tennessee under the name Nexus and is a company that provides drug urine screening services. The government alleged that PremierTox submitted false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services. PremiereTox 2.0 had a settlement and corporate integrity agreement back in 2014 that was a substantial (payment of $15 million) and it seems the company is resolving its legal matters from its old ownership.
The
settlement resolves the government’s allegations that PremierTox and Nexus
submitted 3 types of false claims during the period of September 2011
through June 2014, while PremierTox was under its former ownership and
management. First, the government alleged that PremierTox had a swapping arrangement,
in which Nexus gave below cost discounts on its urine drug screen tests to
patients in Tennessee without insurance, in exchange for physicians’ referring
their patients with Medicare or TennCare coverage to Nexus.
Second, the government contended that in Tennessee, Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary. What happens here is that when the referring In addition, the government claimed that, in Kentucky, PremierTox provided point of care testing cups to medical offices free of charge to induce those providers to use PremierTox’s services.
Second, the government contended that in Tennessee, Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary. What happens here is that when the referring In addition, the government claimed that, in Kentucky, PremierTox provided point of care testing cups to medical offices free of charge to induce those providers to use PremierTox’s services.
Under
the settlement agreement, PremierTox paid a total of $2,500,000. Of that
amount, $2,125,000 covers the conduct in Tennessee, and $325,000 covers the
conduct in Kentucky. The United States will receive $1,757,300 under the
settlement, and Tennessee will receive $325,200.
The
allegations resolved by the settlement were originally raised in two
lawsuits filed against PremierTox in Tennessee and Kentucky under the qui
tam, or whistleblower provision of the False Claims Act. This
provision allows private citizens to bring civil suits on behalf of the
government and to share in any recovery. The
lawsuit in Tennessee was filed by a former office manager of a pain clinic in
Cookeville. The relator in this case will receive $361,250. The relator who
brought the lawsuit in Kentucky is the former CEO of PremierTox and will
receive and $56,250.
The
Tennessee lawsuit remains pending against several other defendants whom the
United States and Tennessee allege violated the False Claims Act and the
Tennessee Medicaid False Claims Act. The remaining claims include
allegations that Lenoir City chiropractor Matthew Anderson operated the
Cookeville Center for Pain Management in which a nurse
practitioner wrote prescriptions that Medicare and TennCare paid for, that had
no legitimate medical purpose; and that Dr. David Florence likewise operated a
pill mill at his Center for Advanced Medicine in Manchester, Tennessee. These are only allegations.
The
two cases are docketed as United States ex rel. Norris v. Anderson, No.
2:13-cv-00035 (M.D. Tenn.) and United States ex rel. Duncan v. Nexus Lab,
Inc., No. 1:14-cv-89-R (W.D. Ky.).
Posted by Tracy Green, Esq.
Posted by Tracy Green, Esq.
