Attorney General William Tong announced this morning that Connecticut will receive $277,780 in restitution after opting into a joint settlement between 42 states, the federal government, and the District of Columbia against Precision Diagnostics, a nationwide toxicology lab. The settlement resolves allegations made against Precision Diagnostics that it had knowingly submitted false claims to Medicaid regarding urine testing that was not medically necessary, as well as engaging in a kickback scheme for testing referrals.
“Kickbacks and claims for medically unnecessary tests threaten the integrity of public health care programs and waste taxpayer dollars,” said Attorney General Tong. “We will continue to work closely with our partners at the state and federal level to root out illegal practices and protect our public healthcare programs and the patients they serve.”
In total, Precision will pay $27 million, plus 4.25% yearly interest, to the federal government, District of Columbia and 43 states including Connecticut as a result of three separate lawsuits filed by whistleblowers. Precision is one of the nation’s largest toxicology labs, and performs urine tests nationwide primarily for drug testing. The suits alleged that from 2013 to 2022, Precision submitted or caused false claims to be submitted to Medicaid for urine drug tests that were “not medically reasonable and necessary for diagnosis or treatment,” according to Tong’s statement.
“Specifically, the United States contends that the Settling Parties developed and implemented a policy and practice of utilizing non-allowable blanket orders for UDT (urine drug testing) without any physician making an individualized determination that the UDT was medically necessary or reasonable for the particular patients for whom the tests were ordered,” reads the settlement. “The medically unreasonable and unnecessary UDT was performed by Precision, and the resulting false claims were submitted to Federal Healthcare Programs.”
Precision was also accused of providing testing cups to physicians in exchange for drug testing referrals from Jan. 2013, through June 30, 2014, in violation of federal anti-kickback laws. According to these laws, laboratories are prohibited from giving physicians gifts in return for test referrals.
The first suit was brought before the District Court of Maryland by whistleblower Bryce Hudak on May 25, 2018. The second was brought before the District Court of DC by an unnamed whistleblower on April 19, 2019. The third was brought before the District Court of Colorado by Elizabeth Buonauro on Feb. 19, 2021. Per the settlement, the government retains the right to pursue each of these cases in the future if the demands of the settlement are not met.
The vast majority of the $27 million will be paid to the federal government, which stands to receive $18.7 million. The remaining $8,713,319 will be split among the 43 plaintiff states. The whistleblowers themselves will also receive a portion of the federal government’s payments. In addition to their payments, Precision Diagnostics also agreed to be placed under the oversight of the U.S.’s Department of Health and Human Services’ Office of Inspector General until payment is completed.
Tong’s statement urged anyone with knowledge of suspected fraud or abuse pertaining to public healthcare should contact the Attorney General’s Government Fraud Section, the state’s Medicaid Fraud Control Unit, or the state’s Department of Social Services’ fraud reporting hotline.
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