A whistleblower’s False Claims Act lawsuit against Carolinas Healthcare System has resulted in a $6.5 million recovery for the federal and North Carolina Medicaid programs.
According to U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, the Charlotte-based hospital system improperly up-coded claims it submitted for urine drug tests so it would receive higher Medicaid reimbursements.
Federal prosecutors contended that from 2011 to 2015, Carolinas HealthCare conducted urine drug tests, categorized as “moderate complexity” tests by the Food and Drug Administration (FDA), but submitted claims for “high complexity” tests.
Claims submitted to federal health care programs include a code that identifies the services provided and that triggers a certain payment. The whistleblower lawsuit alleged that Carolinas Healthcare System routinely up-coded moderate-complexity tests, which trigger payments of about $20 each, as high-complexity tests, which reimburse at a rate of about $100 per test.
This scheme, the lawsuit alleged, led the government to reimburse Carolina Healthcare System and certain affiliates under contract with the company at improperly high rates.
The allegations arose from a lawsuit filed by Mark McGuire, a former laboratory director for CHS, under the whistleblower provisions of the False Claims Act. The government investigated Mr. McGuire’s claims and opted to intervene in the case “to effectuate the settlement.”
As the whistleblower, Mr. McGuire will receive nearly $1.4 million from the settlement amount as a reward for reporting the fraud.
“Medical service providers must respect public resources in government health care programs,” U.S Attorney Rose said in an announcement of the settlement. “As more Americans struggle with health care costs, we must ensure that our programs are efficient and compliant,” she added. “For those medical providers who seek to unlawfully and unfairly take advantage of government health care programs, this case resolution should serve as fair warning.”