Millennium Health Settles False Healthcare Claims for $256M; Whistleblowers to Get $31.83M

Posted: 10/26/2015  browse the blog archive
Millennium Health Settles False Healthcare Claims for $256M; Whistleblowers to Get $31.83M

Millennium Health has agreed to pay $246 million to resolve allegations that Millennium knowingly submitted or caused the submission of false claims for medically unnecessary urine drug and genetic testing and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium, the U.S. Department of Justice announced last week.  Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States and conducts business nationwide.

As part of the settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations, detailed in a complaint filed by the United States, that Millennium systematically billed federal health care programs for excessive and unnecessary urine drug testing.  The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs.  This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury.  The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing—violated the Stark Law and the Anti-Kickback Statute.  The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.

Millennium has also agreed to pay $10 million to resolve False Claims Act allegations that it submitted false claims to federal health care programs for genetic testing that was performed routinely and without an individualized assessment of need. 

In connection with the False Claims Act settlements, Millennium has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG).  In addition, Millennium will pay $19.2 million to the Centers for Medicare and Medicaid Services (CMS) to resolve certain administrative actions related to Millennium’s urine drug test billing practices.

The False Claims Act allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  Under the act, the United States can elect to intervene in an action filed by a whistleblower, as it did, in part, with respect to several of the qui tam actions regarding urine drug testing allegations.  The whistleblowers will receive $30.35 million from the False Claims Act recovery for the urine drug testing claims and $1.48 million from the False Claims Act recovery for the genetic testing claims. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.