Press Releases
03/07/2022
Attorney General Tong Announces $4.8 Million Settlement With Redwood Toxicology Laboratory
(Hartford, CT) – Attorney General William Tong, U.S. Attorney Leonard C. Boyle, and Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of Inspector General announced today that Redwood Toxicology Laboratory, Inc. has entered into a civil settlement agreement with the federal and state governments in which it will pay nearly $4.8 million to resolve allegations it overcharged the Connecticut Medicaid program for certain laboratory services.
Redwood Toxicology Laboratory (“RTL”), with a headquarters located in Santa Rosa, California, provides laboratory-testing services, specifically urine drug testing services, for substance abuse patients enrolled in the Connecticut Medicaid program. The government alleges that RTL violated Connecticut’s so-called “Most Favored Nation” regulation (Conn. Agencies Regs. § 17b-262-649), which provides, in essence, that clinical laboratories should not seek payment from Connecticut Medicaid for services at a price that is higher than the lowest price the laboratory charges for the same or similar services from other third parties. Specifically, the government alleges that RTL regularly accepted payments from Connecticut Medicaid for certain urine drug tests at the rate of $38 per test, while at the same time charging other third parties from $2 to $10.50 for the same or substantially similar urine drug tests.
To resolve the governments’ allegations, RTL agreed to pay $4,797,578, which covers claims submitted to the Connecticut Medicaid program from January 1, 2015, through and including February 24, 2018.
“The state Most Favored Nation regulation exists to ensure fair prices for our taxpayer funded Medicaid program. In coordination with our federal and state partners, we will act aggressively to ensure public funds are protected and well spent,” said Attorney General Tong.
“This laboratory’s overbilling of Medicaid has resulted in a major settlement of nearly $4.8 million, thanks to vigilant anti-fraud action at the state and federal levels,” said Department of Social Services Commissioner Deidre S. Gifford, whose agency administers Medicaid in Connecticut. “I join Attorney General Tong in commending our program integrity staff and law enforcement partners for this successful result on behalf of taxpayers.”
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 ag.fraud@ct.gov; the Medicaid Fraud Control Unit at 860-258-5986 or by email at conndcj@ct.gov; the Department of Social Services fraud reporting hotline at 1-800-842-2155, online at www.ct.gov/dss/reportingfraud, or by email at providerfraud.dss@ct.gov, or by calling 1-800-HHS-TIPS.
Assistant Attorney General Gregory O’Connell, Forensic Fraud Examiner Lisa Bailey, and Jeremy Pearlman, Chief of the Antitrust and Government Program Fraud Department assisted the Attorney General in this matter.
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