A Kentucky urine testing company has paid the U.S. government and the states of Kentucky and Tennessee $2.5 to resolve two whistleblower lawsuits that accused it of Medicare and Medicaid fraud with the submission of false claims for drug screening services.
John E. Kuhn, Jr., U.S. Attorney for the Western District of Kentucky, announced the recovery Tuesday, April 12, saying that PremierTox 2.0 has paid $1,757,300 to the U.S., $2,125,000 to Kentucky, and $325,000 to Tennessee.
The agreement settles allegations that from September 2011 through June 2014, PremierTox submitted three types of false claims to Medicare, TennCare, and Kentucky Medicaid seeking reimbursement for urine tests.
The whistleblower complaints alleged that PremierTox had a swapping arrangement in which Nexus, the name of the company that PremierTox did business as in Tennessee, gave below-cost discounts on its urine drug screen tests to patients in Tennessee without insurance in exchange for physician referrals of Medicare or TennCare beneficiaries to Nexus.
The lawsuits also alleged that, in Tennessee, PremierTox, Nexus overbilled Medicare and TennCare for laboratory testing, contending the company’s claims were “beyond what was medically reasonable and necessary.”
Additionally, the lawsuits claimed that PremierTox provided testing cups to medical offices in Kentucky free of charge to sway those providers into using PremierTox’s services.
“Losses caused by health care fraud amount to tens of billions of dollars every year,” Mr. Kuhn said. “Often those losses are passed along to consumers in the form of increased costs. For that reason, my office will work with federal, state, and local law enforcement to uncover these activities and recover every dollar.”
Derrick L. Jackson, a special agent for the U.S. Department of Health and Human Services’ criminal arm, also had strong words about PremierTox’s actions to defraud taxpayer-subsidized health care programs.
“Medically unnecessary lab tests and financial incentives from labs to doctors in exchange for referrals are costing the taxpayers millions of dollars,” Mr. Jackson said. “This settlement is one of many that are sending a strong message to the lab industry that they need to clean up their act.”
The lawsuit in Tennessee was filed by a former office manager of Cookeville, Tenn., pain clinic. That relator will receive $361,250 for providing the government with tips. The former CEO of PremierTox brought the whistleblower lawsuit in Kentucky and will receive an award of $56,250.