For Immediate Release - July 30, 2009

Attorney General Martha Coakley's Office Reaches Settlement with Boston Clinical Laboratories

Boston Clinical will pay state over $600,000 to settle Medicaid false claims lawsuit

BOSTON - Massachusetts Attorney General Martha Coakley's Office has reached a settlement agreement with Boston Clinical Laboratories, Inc. ("Boston Clinical"), an independent clinical laboratory in Waltham, settling a lawsuit alleging Medicaid False Claims violations. Boston Clinical has agreed to pay $615,000 to the Commonwealth's Medicaid program and $14,000 to the federal Medicare program. Boston Clinical has also agreed to institute a comprehensive compliance program to ensure compliance with state laws and Medicaid regulations.

The settlement, filed in Suffolk Superior Court yesterday, is the result of an ongoing industry-wide investigation by Attorney General Coakley's Medicaid Fraud Division into urine drug tests billed by independent clinical laboratories to the state Medicaid program.

"At a time when state and federal budgets are currently under tremendous strain, it is vital that providers of services in the Medicaid program comply with the regulations to ensure that we are only paying for services that have been properly ordered and which have been authorized for a medically necessary purpose," said Attorney General Coakley. "Our office will continue to work with the state's Medicaid program, other law enforcement agencies and the federal government to ensure that providers comply with state laws and Medicaid regulations."

In October 2007, the Attorney General's Office filed a lawsuit in Suffolk Superior Court against Boston Clinical. The complaint alleged that by intentionally filing claims and receiving reimbursement for urine drug screens that were improperly ordered, Boston Clinical violated the Massachusetts Medicaid False Claims Act, the Massachusetts False Claims Act, breached its Medicaid contracts and was unjustly enriched at the expense of the Commonwealth and its taxpayers. The complaint alleged that from January 2000 through October 2007, Boston Clinical submitted more than 66,000 claims for urine drug screens to Medicaid and that many, if not all, of these urine drug screen claims were not properly ordered by an authorized prescriber or were ordered for non-medical purposes, such as residential sobriety monitoring.

As part of the settlement agreement, Boston Clinical has agreed to hire an independent compliance monitor to develop and implement written compliance protocols for the company, to train all current and future employees on MassHealth compliance issues, and conduct bi-annual compliance audits.

By entering into today's settlement agreement, Boston Clinical does not admit or deny the Attorney General's or MassHealth's allegations.

This case was investigated with the assistance of the U.S. Department of Health and Human Services, Office of the Inspector General and MassHealth. The case was investigated by Joseph Shea and Timothy Johnson of Attorney General Martha Coakley's Medicaid Fraud Division and prosecuted by Assistant Attorney General Toby Unger, also of the Medicaid Fraud Division.