Toxicology lab to pay over $4 million after allegations of unnecessary tests and Medicare claims
(CBS DETROIT) — A Toxicology lab with several medical practices in Michigan will pay over $4.4 million to settle federal claims of unnecessary testing and submitting Medicare claims for reimbursement for those tests.
Federal officials allege that from 2017 through 2019, Physicians Toxicology Laboratory (PTL) encouraged blanket orders of urine drug tests (UDTs) for their Medicare patients, and then billed Medicare for the tests.
Medicare requires that claims for urine drug tests be based on a patient's specific needs, and does not cover blanket orders.
The Tampa, Florida-based company allegedly created forms that included a simultaneous order for two different kinds of urine drug tests. The company also employed urine collectors, who typically filled out the blanket orders for all patients.
"As a result, the practices ordered medically unnecessary and non-covered UDTs from PTL, and PTL knowingly submitted these claims to Medicare," the U.S. Attorney's Office said in a release Friday.
Federal officials also claim the company billed Medicare for hormone level urine tests ordered by one of the practices with almost every urine drug test, despite knowing the tests were ordered as a form of specimen validity testing, which is already covered in the reimbursed costs of urine drug tests.
"Lab tests should be ordered based on each patient's medical needs and not just to increase laboratory profits," said U.S. Attorney Mark Totten, who announced the settlement.
As part of the settlement, the company, a capital group connected with the company, the company's former president Matthew Ryan Lund and co-defendant Thomas C. Lund entered into a three-year integrity agreement with the Department of Health and Human Services Office of Inspector General.
The agreement requires the company to establish and maintain a compliance program and hire a clinical director responsible for making decisions on clinical policies and practices.
The U.S. Attorney's office says the agreement also requires the company to work with an independent review organization to look at claims and determine whether the services were medically necessary and documented correctly.
Federal officials say the claims resolved in the settlement are allegations, and no one has been deemed liable.
