A handful of drug screening laboratories received nearly $100 million from Oklahoma’s Medicaid program over the last five years, prompting an investigation from state officials, according to The Oklahoman.
Documents obtained by the newspaper show an explosion of claims from several major players in the urine-testing industry, including Millennium Health, which entered into a $256 million settlement with the Department of Justice last year to resolve allegations that it billed Medicare for unnecessary drug screening tests. Documents also point to high billing rates from Sky Toxicology, a Texas-based urine screening lab that paid $20 million to settle false claims allegations brought by Cigna last year, and now faces a $50 million lawsuit from UnitedHealth.
Between 2011 and 2014, Oklahoma’s annual reimbursement to urine testing laboratories increased more than 700 percent, from $3.7 million to $32 million, and threatened to drain the state’s healthcare budget. The labs often billed for medically unnecessary tests, or billed for more expensive “quantitative panel” tests that cost as much as $800, according to the Oklahoma Health Care Authority. Several labs also engaged in kickback schemes, compensating physicians in exchange for referrals.
Los Angeles-based attorney Harry Nelson told the newspaper that the first wave of drug screening emerged a decade ago when pain doctors ordered tests for chronic pain patients as a precaution to protect against overprescribing charges, but said a second wave of claims has been from a "profit seeking-period."
A spokesperson for the Oklahoma Attorney General’s office declined to discuss the Medicaid Fraud Control Unit’s investigation, but said “unnecessary lab testing is an issue nationwide.”
Fraud experts have said drug screening has become a “money spigot,” and the Office of Inspector General has repeatedly singled out lab testing as a fraud hot spot. Last month, a Texas laboratory was caught in a scheme that targeted Tricare members, offering $50 Walmart gift cards in exchange for urine and DNA samples.
- read The Oklahoman article