For Immediate Release - August 19, 2011

Clinical Laboratory Pays State More Than $153,000 Dollars to Settle Allegations of Medicaid Fraud

BOSTON - A settlement has been reached with a Bedford clinical laboratory to resolve allegations it overcharged Medicaid for urine drug tests, which were not properly ordered by a doctor or other authorized prescriber for a medically necessary purpose, Attorney General Martha Coakley announced today.

An investigation conducted by the Attorney General's Office of Diagnostic Laboratory Medicine, Inc. (DLM) found that between 2005 and 2011 the laboratory billed Medicaid for urine drug tests which were not properly ordered by a doctor or other authorized prescriber. In addition, the Attorney General's investigation found that DLM had overcharged the state Medicaid program for these urine tests by failing to give the Medicaid program its "best price" and failed to comply with the documentation and record keeping requirements. These alleged violations of state law and Medicaid rules and regulations resulted in significant Medicaid overpayments to DLM.

"Overbilling and failure to comply with Medicaid regulations takes away valuable health care resources from those that need it most," AG Coakley said. "Our office will continue to pursue individuals that abuse the system and return the funds to the state."

In addition to reimbursing state taxpayers in the amount of $153,780.87, plus interest, DLM has agreed to comply with all state laws and Medicaid regulations in the future.

The DLM agreement is the sixth settlement resulting from an ongoing industry-wide investigation by AG Coakley's Medicaid Fraud Division into urine drug tests billed by independent clinical laboratories to the state Medicaid program. To date, this investigation has returned approximately $10 million to the state Medicaid program and resulted in 42 criminal indictments.

This matter was handled by Assistant Attorney General Toby Unger of AG Coakley's Medicaid Fraud Division and investigated by Donna Mitchell and Joseph Shea also of the Medicaid Fraud Division.

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