Precision Toxicology, doing business as Precision Diagnostics, has agreed to pay $27 million to resolve alleged violations of the False Claims Act and similar state statutes for billing Medicare, Medicaid and other federal health care programs for medically unnecessary urine drug tests, and for providing free items to physicians who agreed to refer expensive laboratory testing business to Precision. Precision, headquartered in San Diego, is one of the nation’s largest urine drug testing laboratories.
In the settlement agreement, the United States alleged that Precision systematically billed federal health care programs for excessive and unnecessary urine drug testing from January 1, 2013 through December 31, 2022. In particular, the United States contended that Precision caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which were, in effect, standing orders that caused physicians to order a large number of tests without an individualized assessment of each patient’s needs. The government alleged that this practice violated federal health care program rules limiting 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 Precision’s provision of free point of care urine drug test cups to physicians — expressly conditioned on the physicians’ agreement to return the urine specimens to Precision for additional testing — violated the Anti-Kickback Statute. The Anti-Kickback Statute generally prohibits laboratories from giving physicians anything of value in exchange for referrals of tests.
In connection with the False Claims Act settlement, Precision has also entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Of the settlement amount, $18.2 million will be paid to the United States and the remainder will be paid to the impacted states, including Maryland, Illinois, Minnesota, Virginia, Georgia and Colorado, for the states’ share of Medicaid.
The False Claims Act allegations resolved by the settlement were originally brought in three 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. Two of the cases are captioned United States and Maryland ex rel. Hudak v. Precision Toxicology LLC, ELH-18-1510 (DMD) and United States, Illinois and Minnesota ex rel. Buonauro v. Precision Diagnostics LLC et al., ELH-21-3231 (DMD). The third qui tam case against Precision, brought in the District of Colorado, remains partially sealed.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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