Indy Lab Settles $9M False Claims Case Over COVID Testing
INDIANAPOLIS — An Indianapolis company, Patients Choice Laboratories (PCL), announced Monday it will pay more than $9.6 million to the state of Indiana to settle a case involving false billing to Medicare for COVID-19 and other infectious disease tests. The laboratory denies any wrongdoing in the case.
The U.S. Department of Justice (DOJ) claimed that from December 2020 to May 2022, PCL knowingly submitted claims to Medicare for respiratory pathogen panels, or RPPs, that were either medically unnecessary or obtained through illegal kickbacks.
The government says PCL was hired by the government to perform infectious disease testing, like COVID-19 swabbing, in long-term care facilities. Even though PCL was paid for this service, the company is accused of using the same specimens to bill Medicare for the “medically unnecessary RPPs.” In a few instances, the DOJ says PCL billed Medicare for RPPs without even performing any COVID-19 testing.
The laboratory also violated the Anti-Kickback Statute by paying commissions and other fees in exchange for test referrals that were then billed to Medicare. This included an agreement where PCL paid an infection prevention company $5,000 for “marketing and management services” in long-term care facilities, which the government says was a cover for paying for test referrals. Between December 2020 and May 2022, PCL paid this company $1.86 million for the RPPs, which were then billed to Medicare, resulting in over $6 million in reimbursements to PCL.
Additionally, the DOJ claims that PCL contracted with independent representatives to promote its tests to healthcare providers and paid them a percentage of the revenue generated from the testing they helped facilitate. The total commission payments to these representatives were at least $372,000.
“Kickback arrangements that drive unnecessary testing waste taxpayer dollars and undermine the integrity of our healthcare system,” Tom Wheeler, U.S. Attorney for the Southern District of Indiana, said. “This settlement reflects our commitment to holding accountable those who seek to profit at the expense of federal healthcare programs and the patients they serve.”
