MEDICARE FRAUD: CORNING AND UNILAB SETTLE BLOOD TEST SUIT
Two medical labs will pay $11 million to settle charges thatThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
they overbilled the government for unnecessary lab tests,
AP/Danbury NEWS-TIMES reports (see AHL 8/30). A U.S. District
Court judge approved the settlement, under which the "companies
admit no wrongdoing," on Thursday. The labs, owned by Tarzana,
CA-based Unilab Corp. and Corning, NY-based Corning Inc., were
accused of overbilling Medicare and other government and state
insurance programs by billing for a blood test called a hemogram
indices every time a doctor ordered blood work (Gold, 9/20). The
two whistleblowers who filed the suit, Kevin Spear and C. Jack
Dowden, said that the tests "were never ordered, were medically
unnecessary and provided doctors with generally worthless
information."
THE TEST: Hemogram indices are calculations based on the
"already-provided" test results, so the labs performed no
additional work to justify the extra charges. Because the labs
did not bill doctors who ordered the tests, they didn't know
there was an extra fee. Patients did not challenge the bills
because Medicare pays for all lab charges (Phillips & Cohen
release, 9/19).
REAX: Mary Louis Cohen, a lawyer for Spear and Dowden,
said, "This is an example of why the Medicare fund is going
broke. It was a widespread practice in the medical industry, yet
doctors and patients were completely unaware of it because the
bills were sent directly to Medicare." John Phillips, another
lawyer for the whistleblowers, said, "I think a lot of private
insurers will look to see what they were billed and there may be
more claims."
THE SETTLEMENT: Corning, which said it discontinued billing
for the indices in March 1993, will pay $6.9 million. Unilab,
which halted the practice before August 1995, will pay $4.1
million. Georgia and California will each receive a payment for
"false Medicaid billing" as well. Georgia will get $34,989 and
California will receive $190,643 (AP/NEWS-TIMES, 9/20).