Millennium Health Agrees to Staggering $256 Million Healthcare Fraud Settlement

In one of the larger healthcare fraud settlements of 2015, Millennium Health, LLC has agreed to pay $256 million to settle allegations it engaged in fraudulent and illegal activity with regard to urine drug screens and orders for urinalysis.

The case got its start thanks to a lawsuit filed by several whistleblowers under the False Claims Act. In return for their efforts, the whistleblowers are expected to share a $30.35 million payout under the FCA’s qui tam provisions.

Shortly after the whistleblowers filed their lawsuit, the U.S. government opted to intervene in the case, which it does in just 20 percent of all False Claims Act lawsuits filed. As a result, federal investigators uncovered a widespread and extensive network of illegal kickbacks, medically unnecessary referrals, and orders for urine screens that were not necessary or billable under federal guidelines.

Details of the case against Millennium Health, LLC

Formerly known as Millennium Laboratories, San Diego-based Millennium Health is one of the largest urine testing companies in the United States. In 2015, the company – which was also enduring a Chapter 11 bankruptcy proceeding – faced a quarter-billion dollar settlement over allegations it wrongfully defrauded programs like Medicare and Medicaid in order to pad profits and increase revenues.

According to the allegations, Millennium was accused of coercing physicians into ordering costly and unnecessary tests, using sales-like tactics to over-exaggerate the importance or necessity of certain diagnostic testing services. For instance, the complaint alleged that Millennium wrongfully induced doctors to order a $1,800 genetic testing kit for the treatment of certain pain disorders – a treatment component that is simply not necessary, according to the Department of Health and Human Services.

Moreover, Millennium was accused of enticing area doctors to exclusively refer patients to Millennium for the gamut of their testing needs, an arrangement expressly prohibited by the FCA’s anti-kickback provisions and the federal Stark Law. More specifically, the company provided area practitioners with free urine cups and instructed medical offices that those cups could only be used in a Millennium facility.

In addition, the company was alleged to have encouraged providers to order a “custom profile” for each patient, which included a much broader range of diagnostic tests than was actually necessary in most instances. In sum, the DOJ alleged that the company created the “custom profile” option in order to ensure nearly all referrals were receiving the most extensive possible urine and blood screens, regardless of whether those screens were actually necessary or part of the patients’ care plans.

The Department of Justice’s Head of the Civil Division said in a statement:

“We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”

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