Laboratory Corporation of America (Labcorp), a national clinical diagnostics company, has agreed to pay $14,500,000 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare Part B (Medicare) for medically unnecessary urine drug testing for some patients conducted pursuant to a testing panel offered by Labcorp, called “Toxassure Comprehensive”.

Labcorp’s Toxassure Comprehensive panel contained both “Presumptive” and “Definitive” UDT methods. In general, Presumptive UDT detects the presence or absence of certain drug classes at specific testing thresholds, while definitive UDT identifies individual substances and their concentrations, where applicable.

Medicare payment for UDT is based on bundled payment rates associated with the Current Procedure Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes.

In general, for laboratory-based presumptive testing, Medicare pays a flat rate regardless of the number of drug classes tested, pursuant to CPT code 80307, and for definitive testing, Medicare pays a flat rate for 22 or more drug classes per HCPCS Code G0483.    

As part of the settlement, Labcorp admitted, acknowledged, and accepted responsibility that from January 1, 2018, through November 22, 2023, Labcorp routinely submitted claims for presumptive and definitive UDT to Medicare, some of which were submitted pursuant to a testing panel marketed by Labcorp as “ToxAssure Comprehensive”.

ToxAssure Comprehensive consisted of a preselected combination of presumptive UDT for certain substances and direct to definitive UDT (with no prior presumptive test) for other substances.

Labcorp ran many of these tests simultaneously for the same patient, on the same date of service, using the same urine sample, and billed Medicare with CPT Code 80307 for the presumptive UDT and HCPCS Code G0483 for the definitive UDT.

In other words, Labcorp billed Medicare for both the all-inclusive presumptive CPT code and the highest-tier definitive HCPCS code each time the ToxAssure Comprehensive was performed.

For several of the substances tested on a direct-to-definitive basis, a presumptive testing option existed, but Labcorp performed its definitive tests without first conducting a presumptive test to determine the necessity of definitive testing for that substance.

The United States alleged that the full ToxAssure Comprehensive panel billed as described above resulted in the submission of medically unnecessary claims to Medicare for some of the patients for whom it was performed.

Labcorp also represented in the settlement agreement that it has ceased billing Medicare for the combination of codes 80307 and G0483 for beneficiaries testing with the ToxAssure Comprehensive panel.

Labcorp has been credited in this settlement under the Department of Justice’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases, Justice Manual §4-4.112.