Feds: Free Urine Collection Cups Represented ‘Kickbacks’ to Doctors Illegally Billing Federal Health Programs for Unneeded Tests
Precision Diagnostics allegedly billed federal healthcare programs, including Medicare and Medicaid, for urine drug tests that were medically unnecessary, according to a DOJ press release. Precision reportedly incentivized doctors to order large orders of urine drug tests between Jan. 1, 2013, and Dec. 31, 2022, effectively violating the Anti-Kickback Statute of the False Claims Act.
The incentives? Free urine cups.
Prescribing Unnecessary Tests in Exchange for Free Urine Cups?
Located in San Diego, Precision Diagnostics is a toxicology laboratory providing services to drug testing providers specializing in pain management and substance abuse across the United States, as detailed in the settlement. Between May 25, 2018, and Dec. 21, 2021, multiple qui tam actions were filed and served around the U.S. in states including Maryland, Colorado and Massachusetts. Qui tam actions are complaints filed by individuals on the government’s behalf in exchange for part of the settlement. These private citizens are known as “relators.”
Court filings allege that Precision created a policy that allowed doctors to fill out blanket orders for urine drug testing without first determining that the test was medically necessary for each patient. That practice constituted false claims submitted to federal healthcare programs like Medicare, Medicaid, Tricare and the Veterans Health Administration between January 2013 and December 2022.
Precision allegedly violated the Anti-Kickback Statute when they reportedly provided free urine drug testing cups to doctors who referred them for toxicology screenings, according to the settlement.
Urine Cups = Kickbacks
Typically, in Anti-Kickback Statute violation cases, doctors are provided with compensation or free equipment, even a free place to work. In a recent Sept. 18 settlement covered by The Daily Muck involving a CVS subsidiary, Oak Street Health, they agreed to pay $60 million to resolve allegations that they paid kickbacks and even provided staff and clinic space at little to no cost in exchange for referrals.
Some may argue that the physicians participating in these medicare fraud schemes do it for their patients. The Daily Muck explores this question in a feature article, finding that difficulties and restrictions in the Medicare system make skirting the system more tempting.
In the Precision Technology case, however, the motivation doesn’t appear so noble as court documents alleged that the physicians made large orders of urine tests when they were not medically necessary for the patients.
Due to the multiple qui tam actions taken against Precision, the company is set to settle in different agreements, the settlement says. In this particular settlement, Precision will pay $27 million to the Medicaid Participating States defrauded by the violations. They will also pay a federal settlement of $18,286,680.59 plus 4.25% interest every year that it is not paid off, which started on Jan. 1. Precision has also agreed to pay another $33,196,138.25 in three other settlements.
According to the settlement, Precision is not admitting guilt.
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