Lab to pay millions to resolve unecessary test claims

WASHINGTON (AP) — A North Carolina-based clinical laboratory services company has agreed to pay approximately $43 million to resolve allegations that it billed for medically unnecessary lab tests, the U.S. Department of Justice said Monday.

The settlement involving Genova Diagnostics Inc. of Asheville resolves allegations that Genova improperly submitted claims to Medicare, TRICARE, and the federal employee health program for its lab test profiles because the tests were not medically necessary, the department said in a news release.

The department also said Genova was accused of engaging in improper billing techniques, and of paying compensation to three vendors that violated a law prohibiting physician self-referral.

Under the settlement, Genova has agreed to pay approximately $17 million, through the surrender of claim funds held in suspension by Medicare and TRICARE, plus up to an additional $26 million if certain financial contingencies occur within the next five years.

In addition, the agreement resolves allegations brought by Darryl Landis under the whistleblower provisions of the False Claims Act, which permits private citizens to bring a lawsuit on behalf of the U.S. for fraud and to share in any recovery. The settlement provides for a payment of up to approximately $6 million to Landis.

A statement from Genova said the lab conducted its own investigation and is confident in the medical necessity of the tests and that it acted appropriately.

“While we believed that Genova would have prevailed, we are pleased to avoid considerable distraction and expense by resolving this matter without any admission of guilt or wrongdoing,” the statement said.