Millennium Health, a giant drug and genetic testing company that has been implicated in troublesome claims of fraud and employee abuse under its previous name Millennium Laboratories, has agreed to pay the U.S. $256 million to resolve whistleblower allegations that it billed federal health care programs for expensive and medically unnecessary drug and genetic tests and for providing kickbacks to physicians who referred lab testing business to Millennium.
Millennium will pay $227 million to settle allegations that it systematically defrauded Medicare, Medicaid, and other taxpayer-funded health care programs for excessive and unneeded urine drug testing for several years starting in January 2008. Millennium structured its testing services so that doctors ordered a large number of expensive tests without an individualized assessment of the specific tests needed for patients.
The company will also pay $10 million to resolve whistleblower allegations that it submitted false claims to government health care programs for wasteful genetic tests that were also performed routinely without taking into account individual need.
Additionally, U.S. prosecutors alleged that Millennium violated the Stark Law and Anti-Kickback Statute, which prohibit laboratories from giving anything of value to physicians in exchange for the referral of testing services.
U.S. Attorney Carmen Ortiz of the District of Massachusetts said that Millennium “promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs.”
“A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources,” she said.
Principal Deputy Assistant Attorney General Benjamin Mizer, head of the U.S. Justice Department’s Civil Division, said that Millennium operated “to increase physician and laboratory profits” by ignoring the specific needs of each patient.
“We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs,” Mr. Mizer said.
The settlements resolve allegations originally made by whistleblowers under the qui tam provisions of the False Claims Act. The whistleblowers who tipped the federal government about Millennium’s drug testing practices will receive $30.35 million as their award, while the whistleblowers who exposed the company’s genetic testing practices will receive $1.48 million.