Nation's largest drug testing lab pays $256M to settle claims

After four months of negotiations with the federal government, Millennium Health LLC has agreed to pay $256 million to resolve claims that it billed Medicare for unnecessary tests, according to the Department of Justice.

The settlement had been rumored to reach a quarter-billion dollars following allegations that the company had been selling unnecessary drug tests to pain clinics from 2008 through May 2015. Prosecutors alleged that San Diego-based company promoted "custom profiles," which prompted physicians to order a slew of unnecessary tests, rather than customizing the tests based on an individual patient assessment.

Millennium also violated the Anti-Kickback Statute by providing free testing cups to physician practices, under the condition that they would return specimens to Millennium.

Included in that $256 million payment was a $10 million settlement tied to routine genetic testing that did not qualify for Medicare reimbursement because it is not medically reasonable or necessary.

The company could file Chapter 11 bankruptcy as a result of the payment, sources told the Wall Street Journal. Millennium will also enter a corporate integrity agreement with the Office of Inspector General, which will require the company to appoint independent directors to its board.

Drug testing has become a focal point for federal investigators, particularly after Medicare payments spiked in 2012 when payments for 22 high-tech urine tests reached $445 million, a 1,423 percent increase over five years. Drug screening has been referred to as a provider "money spigot" in the past because of the dramatic increase in unnecessary testing.

For more:
- read the DOJ announcement
- here's the WSJ article

Related Articles:
Millennium Health drug testing lab in settlement talks with federal government
Drug screening becomes provider 'money spigot'
Is high-tech drug testing Medicare's new fatted calf?

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