The Mayo Clinic has agreed to pay $1.26 million to settle claims it falsely billed Medicare and Medicaid for lab tests it never performed, Minnesota's U.S. Attorney's office announced Thursday.
The settlement includes $263,000 that the Rochester, Minn.-based healthcare system already paid the government, as well as an additional $1 million that must be paid.
Because the federal lawsuit stemmed from a 2007 whistleblower case, the government will pay $229,822 to the four whistleblowers involved, according to the state attorney's office.
The original complaint included allegations regarding how the healthcare organization performs tissue pathology, which were later dismissed by the court, Mayo said Thursday in a statement. The U.S. Department of Justice's intervention in 2010 only dealt with the surgical pathology billing issues.
"Upon discovering a billing error in 2007, Mayo promptly corrected it and voluntarily refunded $262,975 to the government," Mayo said in the statement.
The healthcare organization said it decided to settle instead of enduring a lengthy and costly legal battle with the DOJ that would have taken resources away from patient care, education and research efforts.