Signal Diagnostics agrees to pay $20.5 million in U.S. False Claims Act settlement

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Signal Diagnostics $20.5M settlement

Highlights

Signal Diagnostics agreed to pay $20.5 million to resolve allegations of knowingly retaining overpayments from the HRSA Uninsured Program between October 2020 and March 2022.
An internal audit in January 2022 uncovered ineligible claims linked to insured individuals, with Signal continuing to calculate overpayments until May 2023 but delaying repayment to HRSA.
The settlement, with no determination of liability, reflects heightened Justice Department enforcement targeting healthcare fraud and recovering federal funds from COVID-19 relief programs.

Settlement centers on uninsured program overpayments

As reported by U.S. Department of Justice, Signal has agreed to pay the United States $20.5 million to resolve allegations that it knowingly retained funds it should have repaid under the False Claims Act.

The allegations relate to the Health Resources & Services Administration COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program, which reimbursed eligible providers between approximately May 2020 and April 2022. During the public health emergency, Signal provided COVID-19 testing at public testing sites and client locations.

Federal authorities allege that between October 2020 and March 2022, Signal submitted claims for COVID-19 testing services and specimen collection to the Uninsured Program for people who had other coverage. The Justice Department says Signal began an internal audit in or around January 2022, found ineligible claims linked to insured individuals, and then continued through May 2023 to calculate overpayments while improperly avoiding repayment to HRSA.

The audit allegedly found claim errors including multiple profiles for the same person with conflicting insurance information and submissions to the Uninsured Program even though alternative insurance was listed on file. The settlement resolves allegations only, and there has been no determination of liability.

Healthcare fraud enforcement remains a priority

Justice Department officials say the case underscores the government's focus on recovering taxpayer funds and policing misuse of federal healthcare programs. Assistant Attorney General Brett A. Shumate said companies that knowingly retain federal healthcare money they were not entitled to receive violate both the law and public trust.

Miranda L. Bennett, acting deputy inspector general for investigations at the U.S. Department of Health and Human Services Office of Inspector General, said providers that receive federal program funds must return money they are not entitled to keep. She said avoiding repayment undermines a program created to support uninsured patients during a national public health emergency.

The matter was handled by the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG. The department also links the case to the Administration's broader anti-fraud push, including the Task Force to Eliminate Fraud and the National Fraud Enforcement Division, which target waste, abuse, and fraud across federal programs.

Our earlier report on the Independence Blue Cross Medicare Advantage settlement detailed how federal authorities alleged the insurer kept inflated CMS payments by submitting unsupported diagnosis codes and failing to withdraw them. The article also highlighted rising enforcement pressure around risk-adjustment practices, whistleblower-driven False Claims Act cases, and the government’s focus on recovering overpayments across major healthcare programs.

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