Quest Diagnostics to Pay $1.79 Million to Settle Fraud Claims

A New Jersey-based diagnostic clinical laboratory has agreed to pay $1.79 million to settle claims it defrauded Medicare.
Image source: Wikimedia Commons

Under the guidelines of Medicare Part B, enrollees are entitled to coverage for medically necessary and essential diagnostic services, including bloodwork, x-rays, and similar imaging examinations. If a provider fails to adhere to the Medicare guidelines, it could quickly face liability under the False Claims Act for unlawfully billing the government in violation of established regulations.

In today’s case,[1] we review a recent $1.8 million settlement between well-known laboratory chain Quest Diagnostics and the Department of Justice. According to the details of the settlement, Quest Diagnostics is alleged to have ordered and performed duplicative tests, upcoded certain tests, and overbilled the government for its services.

The case was first brought to light by a former Quest Diagnostics employee who worked as a phlebotomist. In exchange for her efforts, she will receive $358,000 as her qui tam reward.

The Allegations Against Quest Diagnostics

According to the allegations, the alleged misconduct spanned a period of at least ten years, ranging from 2004 through 2014. During that time, the laboratory would allegedly receive legitimate orders from practitioners for blood work and clinical panels. Instead of conducting the diagnostic services as instructed in the prescription, Quest Diagnostics allegedly submitted duplicative claims for reimbursement stemming from the same patient interaction. More specifically, the company is alleged to have double-billed for thousands of venipuncture services. This is the process of withdrawing a sample of blood for the purpose of analysis or testing, and it’s usually accomplished by using a needle to puncture the cubital vein of the forearm.

During the investigation, the Department of Justice unearthed documentation to support the notion that Quest Diagnostics was attempting to cover up this misconduct by pointing to records indicating that the same patient was ordered to have the same clinical workup performed by two different providers. Of course, as the Department of Justice contends, this does not excuse the company from the alleged double billing, as the same blood draws could have been used to satisfy both orders.

Quest Diagnostics has maintained its blamelessness in the matter,[2] citing a technological glitch. Moreover, the company noted that the settlement amount reflects one one-hundredth of one percent of the amount of money it receives from Medicare each year.

Second Settlement in Recent Years

While this settlement may be small compared to Quest Diagnostics’ overall Medicare/Medicaid business, a settlement between it and the government in 2009[3] was not so insignificant. In that case, Quest agreed to pay $302 million to settle claims it knowingly used defective diagnostic equipment to report patient blood draws and diagnostic tests. In addition to the civil penalties, Quest and several of its subsidiaries were slapped with enormous criminal fines and charges, including one $40 million penalty against subsidiary Nichols Institute Diagnostics. In essence, the cause of action alleged that Quest’s use of faulty equipment caused providers nationwide to submit claims for reimbursement based on clinical tests that were not accurate and therefore non-reimbursable.

Contact a reputable whistleblower attorney today!

If you are aware of possible fraud within the healthcare industry and would like to speak to a reputable whistleblower lawyer about your information, contact Berger & Montague, P.C. today.


[1] http://www.bizjournals.com/sacramento/news/2015/08/26/clinical-lab-chain-pays-1-8-million-to-settle.html

[2] http://www.corporatecrimereporter.com/news/200/quest-diagnostic-to-pay-1-79-million-to-settle-false-claims-act-charge/

[3] http://www.justice.gov/opa/pr/quest-diagnostics-pay-us-302-million-resolve-allegations-subsidiary-sold-misbranded-test-kits

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By | 2018-03-26T02:28:28+00:00 September 7th, 2015|Healthcare Fraud|