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Millennium Health Agrees to Pay $256 Million to Resolve Allegations of Unnecessary Drug and Genetic Testing and Illegal Remuneration to Physicians

Millennium Health agreed to pay the government $256 million to resolve allegations that it defrauded Medicare, Medicaid and other federal programs by billing them for medically unnecessary genetic and urine tests. Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States.

On October, 19 – as part of an announced settlement – Millennium agreed to pay $227 million to resolve these allegations under the False Claims Act, which imposes liability on persons and companies who defraud governmental programs. The government alleged that from January 1, 2008 through May 20, 2015 Millennium prompted physicians to order an excessive amount of urine drug tests for patients that were medically unnecessary for the treatment or diagnosis of individual patient’s illness or injury. The tests were done through promotion of “customer profiles” which instead of being tailored to individual patients were in effects orders to physicians to conduct these unnecessary tests. The tests, the government alleged, were not based on necessity but instead were conducted for the sole purpose of billing Medicare, Medicaid and other federal health programs. The practice violated federal rules limiting payment to services that are medically necessary for the treatment and diagnosis of patient illness or injury.

The government further alleged that Millennium’s free point of care urine test cups to physicians – which it conditioned on the physician’s agreement to return to Millennium for hundreds of dollars worth of additional testing – violated both the Stark Law and the Anti-Kickback Statute. The Stark Law (named for United States Congressman Pete Stark (D-CA) who sponsored the bill) and the Anti-Kickback Statute prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.

Millennium also agreed to pay $10 million to resolve charges under the False Claims Act that from January 1, 2012 through May 20, 2012 it submitted false claims that were as a result of medically unnecessary genetic testing. Additionally, Millennium as part of a corporate integrity agreement it has entered due to the settlement, agreed to pay $19.2 million to the Centers for Medicare and Medicaid Services (CMS) to resolve administrative actions related to Millennium’s urine drug test billing practices.

Originally the False Claims Act allegations were brought about in a qui tam law suit. The qui tam provision of the False Claims Act is commonly referred to as the whistleblower law. The law allows for private parties to bring suit on the behalf of the government and to share in any recovery. Whistleblowers rewards in this case will total $31.83 million.

Medicare fraud cases have been in the spotlight recently due to increased scrutiny from the Justice Department. Since January 2009, the Justice Department has recovered more than $25.3 billion through False Claims Act cases. More than $16.2 billion of that amount has been recovered in cases involving fraud against federal health care programs. The investigation was spearheaded by the government’s Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.

The investigation was conducted by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the District of Massachusetts, HHS-OIG and HHS’ Office of the General Counsel, CMS, the Office of Personnel and Management Office of Inspector General, the U.S. Postal Service Office of Inspector General, the Department of Veterans Affairs and the FBI.