March 28, 2023. LabCorp has agreed to pay the United States more than two million dollars to resolve False Claims Act allegations for genetic testing fraud. A whistleblower brought to the Department of Justice’s attention that LabCorp was overbilling for certain genetic tests performed by their third-party reference lab partner, GeneDx, LLC. It was alleged that LabCorp inappropriately billed and/or double- and triple- billed the government for genetic tests it provided as part of a Department of Defense (DoD) contract, as well as billed for tests without adequate documentation. The whistleblower was a former Labcorp employee, and they received $357,000 for their part in a qui tam lawsuit against the lab. This settlement demonstrates the government’s commitment to tackling healthcare fraud and protecting taxpayer funds.
Labcorp secured a government contract to provide laboratory testing for all DoD Military Treatment Facilities. Labcorp used GeneDx as a reference lab for any genetic tests performed under the contract. According to the allegations, from December 2013-June 2021, the laboratory services provider overcharged the government for genetic tests, including double- or triple-billing for the same test and billing for improperly documented tests.
The False Claims Act is a federal law that makes it illegal for any person or entity to knowingly submit false or fraudulent claims for payment to the government. The act also imposes civil liability on those who submit such claims and allows individuals who discover and report fraud to receive a portion of any settlement or award, up to 30% of the settlement in some cases. The goal of the False Claims Act is to protect taxpayer money from being wasted due to fraudulent activity. The False Claims Act applies to all types of government programs, including healthcare and defense contracts. If a company submits false claims, it can be held liable for up to three times the amount of money that was wrongfully obtained (i.e., “treble damages”). Additionally, individuals who submit false claims can be held personally liable and may face criminal penalties.
The settlement between LabCorp and the Department of Justice serves as an example of how the False Claims Act can be used to fight healthcare fraud. By providing incentives for whistleblowers to come forward, this law deters fraudulent billing practices and holds accountable those who overcharge the government for services. The settlement also highlights the importance of whistleblowers in uncovering and reporting such fraud and provides a reminder to all healthcare providers that fraudulent billing practices are unacceptable. With the False Claims Act in place and whistleblowers ready to come forward, taxpayers can rest assured that their funds are being used responsibly.
If you would like to report healthcare and laboratory fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.