A federal judge in New York’s Southern District Court recently unsealed a federal qui tam complaint alleging that Laboratory Corporation of America violated the federal False Claims Act by providing kickbacks to UnitedHealthcare in the form of highly reduced prices on tests. More specifically, the suit claims prices on tests were a third to half of those paid by Medicare. The complaint also alleges the lab company agreed to pay up to $200 million in the first three years of the contract in order to cover any costs UnitedHealthcare might incur in making such arrangements or recommendations.
This is not the first time LabCorp has been alleged to engage in such fraudulent activity. In June 2011, the California state attorney general announced a $49.5
million settlement with LabCorp after allegations that it, and other labs, had overcharged the state’s Medicaid program in comparison to highly reduced private payors, while providing kickbacks to doctors, hospitals and clinics that referred MediCal patients.
At this time, the Department of Justice has given no indication as to whether it will intervene, but it maintains the ability to intervene at its discretion.
This post was contributed by Charles Dunham.