Millennium Laboratories to Pay $256 Million to Resolve False Billing and Kickback Claims
Adetokunbo Fakeye
BOSTON—Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid, and other federal health care programs for medically unnecessary drug testing and genetic testing, and provided kickbacks to physicians to induce business.
According to FBI release, Monday announcement reflects two False Claims Act settlements between Millennium and the Department of Justice and an administrative settlement agreement between Millennium and the Department of Health and Human Services. Millennium, headquartered in San Diego, Calif., is one of the largest urine drug testing laboratories in the United States.
As part of Monday’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations that it systematically billed federal health care programs for excessive and unnecessary drug testing from Jan. 1, 2008 through May 20, 2015. (A copy of the United States’ complaint, with exhibits, is available here.)
The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being customized for individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. Millennium’s use of the so-called “custom profile” led to the over-billing of federal health care programs which limit payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury.
The United States also alleged that Millennium violated the Stark Law and Anti-Kickback Statute by providing physicians with free drug test cups on the express condition that the physicians return the specimens to Millennium for hundreds of dollars’ worth of additional testing.
Millennium has also agreed to pay $10 million to resolve allegations that it submitted false claims to federal health care programs for medically unnecessary genetic testing that was performed on a routine and preemptive basis, without an individualized assessment of need, from Jan. 1, 2012 through May 20, 2015.
Routine genetic testing is not medically reasonable and necessary, and therefore does not qualify for Medicare reimbursement.
The report stated as follows: “Millennium promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts.
“A laboratory which knowingly conducts medically unnecessary testing operates unlawfully and squanders our precious federal health care resources.”
“The Department of Justice is committed to ensuring that laboratory testing, including drug testing, is ordered based on each patient’s medical needs and not for physician or laboratory profit,” said Benjamin Mizer, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “Millennium’s promotion of excessive, non-patient specific test ordering—and its test cup giveaways to physicians to increase that ordering—resulted in significant unnecessary costs being imposed upon our nation’s health care programs.”
“When corporations, such as Millennium, bill Medicare for medically unnecessary tests, they threaten the financial integrity of public healthcare programs,” said Special Agent in Charge Harold H. Shaw of the Boston Division of the Federal Bureau of Investigation.
“The FBI hopes this settlement will send a strong message that fraudulent practices by medical labs will not be tolerated.”
In connection with False Claims Act settlements, Millennium has entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
The announcement also includes a $19 million settlement between Millennium and the Centers for Medicare and Medicaid Services (CMS) to resolve administrative actions regarding Millennium’s claims to Medicare for certain drug test billing codes. These claims were the subject of claim denials and an overpayment action initiated by CMS and its contractors.
The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.
The United States filed its False Claims Act complaint on the urine drug testing allegations after intervening in consolidated complaints filed under the qui tam, or whistleblower provisions of the False Claims Act by Mark McGuire, Ryan Uehling, and Omni Healthcare Inc.
The genetic testing allegations were also filed in a qui tam complaint filed by Omni Healthcare Inc. In connection with today’s announced settlements, whistleblowers will receive fifteen percent of the federal recovery from the urine drug testing False Claims Act settlement and sixteen and one half percent of the federal recovery from the genetic testing False Claims Act settlement.
The investigation into the case was conducted by the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; CMS; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel and Management, Office of Inspector General; and the United States Postal Inspection Service.
The cases were handled by Assistant U.S. Attorneys George Henderson, Abraham George, and Sonya Rao of Ortiz’s Civil Division and Trial Attorneys Douglas Rosenthal and Augustine Ripa of the Justice Department’s Civil Division, Commercial Litigation Branch.