LabCorp has agreed to pay $49.5 million to resolve a lawsuit by the California Attorney General’s Office asserting that the company overbilled Medi-Cal, California’s Medicaid program, for testing services and paid unlawful kickbacks to doctors for patient referrals. LabCorp’s misconduct was brought to the attention of the Attorney General’s office by a Hunter Laboratories, a LabCorp competitor turned whistleblower. According to the lawsuit, LabCorp offered free or discounted testing services to physicians, clinics, and hospitals to induce patient referrals, while at the same time overcharging Medi-Cal for testing services in order to subsidize its discounts to private healthcare providers. As a result, companies, such as the whistleblower Hunter Laboratories, were unable to compete in California’s lab testing market.
