Consumer Fraud

U.S. Sues Wisconsin Drug Testing Lab, Alleging Extensive Medicaid Fraud

Pills Stethascope on Money 435x289 U.S. Sues Wisconsin Drug Testing Lab, Alleging Extensive Medicaid FraudThe U.S. government has filed a False Claims Act lawsuit against a Milwaukee, Wis., drug screening company, alleging it committed Medicaid fraud, cheating the program out of millions of dollars by overbilling for urine tests, as well as billing for duplicative and unnecessary tests.

According to the federal government’s lawsuit, Acacia Mental Health Clinic’s Medicaid billing schemes grew increasingly aggressive from 2011 and 2015 until it captured 99 percent of all Medicaid payments to mental health and substance abuse counseling providers in the state, the Milwaukee Journal Sentinel reported.

According to the Journal Sentinel, the government’s lawsuit alleges that Abe Freund bought Acacia in 2009 and with it devised schemes in which it could handle patients and drastically increase its Medicaid billings.

“From January 2011 until October 2012, Acacia routinely submitted false claims that resulted in a $230 reimbursement for each drug screen when the proper reimbursement was only approximately $20 — and Acacia’s cost for the test was just $5,” the lawsuit alleges.

“From there, Acacia’s scheme grew aggressively so that, by 2013, Acacia was obtaining an average of $474.66 per testing event. Based in large part on these false billings, Acacia’s overall Wisconsin Medicaid reimbursement grew from about $332,000 in 2011 to about $3.3 million in 2014, for a total of over $7.3 million from 2011 to 2014.”

Medicaid considers urine drug screens medically necessary only when a physician makes individualized prescriptions about the frequency of testing and the specific drugs to screen the patient for.

“But at Acacia, Freund required every patient to provide a urine sample during every type of visit, whether they were being seen for substance abuse or mental health issues, the suit contends, and all the samples were tested for the same drugs,” the Journal Sentinel reported.

Acacia also falsely upcoded basic urine tests as more complex tests for billing purposes, and purchased more expensive testing equipment so it could bill Medicaid more, even though the new machines generated the same results, the lawsuit contends. In some cases, Acacia billed for tests that were never performed, federal prosecutors claim.

“In all, the number of urine drug screens claimed by Acacia rose from 1,559 in 2011 to 8,997 in 2014, vastly more than any other mental health care outlet in Wisconsin,” the Journal Sentinel reported. “Payments rose from $179,191 in 2011 to $2.9 million in 2014, for a total of nearly $5.9 million — or 99% of state reimbursements to mental health and substance abuse providers in the state.”

The government’s lawsuit is related to a False Claims Act complaint filed in 2013 by whistleblower Rose Presser, a nurse practitioner who worked at Acacia. Ms. Presser alleges the company was requiring excessive drug screens, billed initial appointments as clinical assessments, and required prescription refills too frequently. The U.S. government chose not to intervene at the time but said it would continue to investigate and monitor those allegations. That case remains pending in a Milwaukee federal court.

Source: Milwaukee Journal Sentinel