FWA (KY) – Kentucky companies pay $1.7M to settle fraud Medicaid claims


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[MM Curator Summary]: 2 labs in KY ran a lab scheme tied to court-ordered drug tests.



Clipped from: https://www.kentucky.com/news/local/crime/article275259571.html

Two Kentucky-based businesses have agreed to collectively pay about $1.7 million to resolve allegations they illegally billed Medicaid and Medicare for court-ordered drug testing.

One of the accused companies was Blue Waters Assessment and Testing Services, LLC, which is based in Lexington and provides services related to urine drug testing, including tests for individuals ordered by the Fayette County family courts as part of their cases.

The Lexington company sent the specimens to VerraLab JA, LLC, a clinical laboratory based in Louisville that does business under the name BioTap Medical, according to the U.S. Attorney’s Office. BioTap performed the urine drug tests and billed them to Kentucky Medicaid and Medicare.

The BioTap group received payments from medicaid and medicare which they were not entitled to and agreed to pay nearly $1.5 million as part of a settlement against the false claims. Blue Waters Assessment and Testing and its owner, David Waters, agreed to pay an additional $250,000 for roles in submitting the claims, according to the U.S. Attorney’s Office.

The government said billing these tests to state Medicaid and Medicare violated the False Claims Act, which prohibits fraudulent claims being submitted.


“Submitting false claims to Medicare or Medicaid wastes taxpayer dollars and undermines the integrity of those programs,” said Tamala E. Miles, special agent in charge at the Department of Health and Human Services, Office of Inspector General.

As federally-funded health insurance, Medicaid and Medicare do not pay for tests given to satisfy a court order.

Medicaid and Medicare only pay for laboratory tests used for medical diagnosis or treatment, according to the U.S. Attorney’s Office.

“In fact, Medicaid’s regulations explicitly prohibit reimbursement for laboratory tests, such as urine drug tests, that were ordered by a court,” the United States Attorney’s Office said.

“The federal Medicaid and Medicare programs are designed – and funded – to provide health care benefits to eligible individuals with a medical necessity,” Carlton S. Shier, IV, U.S. attorney for the Eastern District of Kentucky, said in a press release. “These lab tests were not medically necessary and were improperly billed to these programs.

“It is important to all of us that steps are taken to return such misapplied funds to their appropriate purpose – providing medical care.”