Millennium Health pays $256 million for unnecessary drug and genetics testing and doc kickbacks

Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid and other federal health care programs 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 Justice Department announced today.  Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States and conducts business nationwide.

“The Department of Justice is committed to ensuring that laboratory tests, including drug and genetic tests, are ordered based on each patient’s medical needs and not just to increase physician and laboratory profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”

As part of today’s announced 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 from Jan. 1, 2008, through May 20, 2015.  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 from Jan. 1, 2012, through May 20, 2015, for genetic testing that was performed routinely and without an individualized assessment of need.

“Millennium allegedly promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.  “A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources.”

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.

“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG.  “Most of the board will be comprised of new independent members.  Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”

“CMS is committed to exercising quick and effective oversight to protect Medicare beneficiaries and the Medicare Trust Fund,” said Acting Administrator Andy Slavitt for CMS.  “The resolution of this case is the result of the important partnership between CMS and the Department of Justice.”

The False Claims Act allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tamprovisions 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.

 

Jeffrey Newman represents whistleblowers  none in this case.