San Diego company to pay $27 million to settle settlement claims for unnecessary drug testing – San Diego Union-Tribune

San Diego-based Precision Diagnostics, one of the nation's largest urine and saliva drug-testing laboratories, agreed to pay $27 million to resolve allegations by the U.S. government and several states that they violated federal health care programs unnecessary tests billed.

The government alleged that Precision Diagnostics violated the law by billing federal health care programs, including Medicare and Medicaid, for medically unnecessary urine drug tests between January 1, 2013 and December 31, 2022. The allegations were made under the False Claims Act, which holds accountable people and companies that defraud government programs.

It was alleged that Precision enabled higher volumes of urine drug testing by promoting “individual profiles” for patients, which the government said were like standing orders from doctors. Federal health care program regulations limit payments to services that are reasonable and medically necessary to treat or diagnose a patient's condition.

Precision Diagnostics said in a news release Wednesday that by entering into the settlement with the United States, it was committed to “compliance, transparency and the highest standards of patient care” without any admission of wrongdoing.

“The government's rules and regulations governing the delivery of healthcare are extremely complex and often ambiguous, and in the areas questioned by the government, Precision Diagnostics' practices, such as the appropriate use of “custom profiles” and point-of-care, have Care tests that actually improve the patient “We took care of everything and followed government guidelines,” the company said in a statement.

The lawsuit also alleged that Precision violated the anti-kickback statute when it provided doctors with free urine drug testing cups for patients with the understanding that those urine samples would be returned to the company for testing. The law says labs cannot give doctors anything in return for referrals for tests.

“The Department of Justice is committed to ensuring that laboratory tests are ordered based on the medical needs of each patient and not just to increase laboratory profits,” said Brian M. Boynton, Assistant Attorney General and Chief of the Justice Department’s Civil Division. “We will not tolerate practices that unnecessarily increase the costs of government health programs and result in the misuse of taxpayer dollars.”

Part of that settlement involves Precision entering into a so-called corporate integrity agreement with the Department of Health and Human Services' Office of Inspector General for five years. This means the company will “implement enhanced oversight and strict compliance measures to ensure compliance with all regulatory requirements.”

“We are fully committed to maintaining the highest standards of integrity and patient care,” said Miguel Gallego, CEO of Precision Diagnostics, in a press release.

The company said it reached a settlement agreement with the Justice Department and state attorneys general's offices following an investigation that has been ongoing for more than five years.

The claims against Precision originally arose from three separate whistleblower lawsuits filed on behalf of the government.

The United States and the states of Maryland, Illinois, Minnesota, Virginia, Georgia and Colorado will receive $18.2 million of the settlement for Medicaid. One of the whistleblowers, Bryce Hudak, will receive approximately $2.7 million in connection with the False Claims Act recovery.

Originally published: October 4, 2024 at 7:49 p.m