Attorney General Reaches False Claims Act Settlement with Mass. Laboratory over Medically Unnecessary Drug Tests
A Massachusetts-based clinical laboratory will forfeit $656,912 and be excluded from participation in Connecticut's Medicaid program for 10 years as part of a settlement agreement with the state, Attorney General George Jepsen and state Department of Social Services (DSS) Commissioner Roderick L. Bremby said today.
Precision Testing Laboratories, Inc. (PTL), based in Southbridge, Mass., was enrolled as a licensed clinical laboratory in the Connecticut Medical Assistance Program (CMAP), which includes Connecticut's Medicaid program. PTL promoted itself as a laboratory that was committed to providing urine drug testing services to those in recovery from substance abuse. David Fromm (Fromm) of Hull, Mass., is PTL's president and owner.
The state alleged that PTL aggressively marketed an expensive and unnecessarily complex drug testing package to residential drug treatment facilities and sober homes, despite the fact that PTL knew that: (1) the facilities and homes did not provide a physician-managed drug treatment program; and (2) the need for drug testing at those facilities and homes was limited to ensuring sobriety as a condition of residency and, therefore, a less expensive drug test result would have sufficed for that purpose.
The state alleged that in PTL's sales pitch to residential drug treatment facilities and sober homes it offered free on-site specimen collection and fast online results, but also emphasized that all of its testing and services would be done at no cost to the facilities and homes; instead, PTL would simply bill their residents' insurance, the vast majority of whom received coverage through the CMAP.
The state further alleged that PTL submitted false claims to the CMAP for expensive drug tests that were not medically necessary as required under PTL's provider agreement, because the tests were: (1) not part of a physician's drug treatment program; (2) not specifically tailored to address each individual resident's particular medical condition; and (3) much more costly than alternative less costly drug testing.
"Enforcement of the False Claims Act and protection of our taxpayer-funded healthcare programs continues to be a priority of my office," said Attorney General Jepsen. "Medical necessity is an important distinction in Medicaid provider agreements, and we alleged that this provider knew that it was violating its provider agreement in billing Medicaid for these expensive tests, yet did so regardless. This provider diverted taxpayer funded monies intended to help address drug and alcohol abuse treatment into his own pocket. My office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the state's Medicaid program."
DSS Commissioner Bremby said, "While outliers like this laboratory do not represent Medicaid providers as a whole, this enforcement action clearly underscores the fact that strong anti-fraud measures are needed to protect the integrity of public health coverage programs. As administering agency for Medicaid, DSS thanks and commends Attorney General Jepsen and his staff, the Massachusetts Attorney General's Office, our own investigators, and other state and federal partners for outstanding work in rooting out fraud and abuse."
As part of the settlement agreement, PTL and Fromm have agreed to forfeit $656,912 in payments that had been suspended by DSS. Of that, $394,147 represents the state's share of the funds, which will be returned to the CMAP program. Additional funds will be remitted to federal Medicaid.
Additionally, both PTL and Fromm have agreed to and executed a suspension agreement with DSS that excludes them from participation in CMAP for a period of 10 years.
The Connecticut Office of the Attorney General worked closely with the Massachusetts Office of the Attorney General's Medicaid Fraud Control Unit during their joint investigation of PTL, and the Massachusetts Attorney General has contemporaneously reached a separate settlement with PTL and Fromm.
Today's action is part of a larger effort by the State of Connecticut's Interagency Fraud Task Force, which was created in July 2013 to wage a coordinated and proactive effort to investigate and prosecute healthcare fraud directed at state healthcare and human service programs. The task force includes a number of Connecticut agencies and works with federal counterparts in the U. S. Attorney's Office and the U.S. Health and Human Services, Office of Inspector General – Office of Investigations. For more information, please visit www.fightfraud.ct.gov.
Anyone with knowledge of suspected fraud or abuse in the public healthcare system is asked to contact the Attorney General’s Antitrust and Government Program Fraud Department at 860-808-5040 or by email at email@example.com; the Medicaid Fraud Control Unit in the Office of the Chief State’s Attorney at 860-258-5986 or by email at firstname.lastname@example.org; or the Department of Social Services fraud reporting hotline at 1-800-842-2155, online at www.ct.gov/dss/reportingfraud, or by email to email@example.com.
Legal Investigator Thomas Martin and Assistant Attorneys General Joshua Jackson and Michael Cole, chief of the Antitrust and Government Program Fraud Department, assisted the Attorney General with this matter.
Please click here to view the settlement documents.
Jaclyn M. Severance