Labcorp to pay $14.5 million in Medicare false claims settlement

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Labcorp Medicare settlement

Highlights

Labcorp agreed to pay $14.5 million to resolve allegations it billed Medicare Part B for unnecessary urine drug testing from Jan. 1, 2018, through Nov. 22, 2023.
Labcorp admitted it had inappropriately billed CPT code 80307 and HCPCS code G0483 together and has since stopped this billing practice for the ToxAssure Comprehensive panel.
The settlement is part of a wider Justice Department crackdown targeting fraud and abuse in federal healthcare programs, with no liability determined for Labcorp.

Settlement centers on Medicare billing practices

As reported by U.S. Department of Justice, the settlement resolves allegations that Laboratory Corporation of America billed Medicare Part B for unnecessary urine drug testing performed for some patients under its ToxAssure Comprehensive offering.

The Justice Department said the panel combined presumptive urine drug testing with direct-to-definitive testing for other substances, and that Labcorp often ran those tests simultaneously for the same patient, on the same service date, using the same urine sample. Prosecutors alleged the company then billed Medicare under CPT code 80307 for presumptive testing and HCPCS code G0483 for definitive testing, the highest-tier definitive billing code covering 22 or more drug classes.

Under the agreement, Labcorp admitted, acknowledged and accepted responsibility for certain facts covering the period from Jan. 1, 2018, through Nov. 22, 2023. The government alleged that for several substances tested on a direct-to-definitive basis, a presumptive testing option existed but was not used first to establish whether definitive testing was medically necessary.

Labcorp also said in the settlement agreement that it has stopped billing Medicare for the 80307 and G0483 code combination when beneficiaries are tested through the ToxAssure Comprehensive panel. The company received credit under Justice Department guidelines for disclosure, cooperation and remediation in False Claims Act cases.

Broader fraud crackdown targets healthcare providers

Justice officials said the case reflects a wider push to pursue fraud, waste and abuse in federal healthcare programs. Assistant Attorney General Brett A. Shumate, U.S. Attorney Leah B. Foley and Acting Deputy Inspector General for Investigations Miranda L. Bennett said the government is focusing on testing and billing practices that prioritize revenue over medical necessity and taxpayer protection.

The matter was handled by the Justice Department's Civil Division, Commercial Litigation Branch and Fraud Section, together with the U.S. Attorney's Office for the District of Massachusetts, with investigative support from HHS-OIG and the FBI. The department also linked the case to the Administration's broader anti-fraud agenda, including the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

The Justice Department said the settled claims remain allegations only and that there has been no determination of liability.

Our earlier article covered the $7.3 million False Claims Act settlement involving Redi-Bag USA and its CEO over alleged evasion of antidumping duties on Chinese-made polyethylene retail carrier bags by declaring them as originating from Hong Kong. We noted that the case was tied to a broader DOJ trade-enforcement push, including plans for a cross-agency Trade Fraud Task Force aimed at tariff evasion and other import-compliance violations.

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