Officials: Lab pays $4.8 million for overcharging CT Medicaid patients

MM Curator summary

[MM Curator Summary]: The lab was charging CT Medicaid4x what it was charging other payers for urine drug tests, and that’s a no-no.


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A national laboratory paid nearly $4.8 million to resolve allegations it overcharged the Connecticut Medicaid program for certain lab services over the span of several years, according to officials on Monday.

Connecticut Attorney General William Tong and other officials announced the settlement with Redwood Toxicology Laboratory on Monday, alleging that the lab violated the state’s “Most Favored Nation” regulation.

The regulation indicates that clinical labs should not seek payment from Connecticut Medicaid for services at a price higher than the lowest price the lab charges for the same or similar services from other third parties.

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The lab, based in Santa Rosa, Calif., offers lab testing services like urine drug testing services for substance abuse patients in the Connecticut Medicaid program.

Specifically, officials said, the lab regularly accepted payments from Connecticut Medicaid for specific urine drug tests at a rate of $38 per test. However, the lab was charging other third parties from $2 to $10.50 for the same or similar tests, officials said.

The lab agreed to pay $4,797,578 to cover claims submitted to the Connecticut Medicaid program from Jan. 1, 2015, through Feb. 24, 2018.

Anyone who suspects health care fraud is encouraged to report it by calling 1-800-HHS-TIPS.


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