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You Can’t Ace These Tests: Whistleblower Exposes Unnecessary Lab Testing Fraud, Awarded $2.3 Million

Date Published
Mar 29, 2024

MARCH 28, 2024. Missouri-based laboratory Gamma Healthcare Inc. (Gamma) and three of its owners, Jerry W. Murphy, Jerrod W. Murphy, and Joel W. Murphy (the Murphys), will pay $13,619,660.18 to settle alleged False Claims Act violations brought by a whistleblower. Gamma and the Murphys allegedly submitted or caused the submission of fraudulent claims to Medicare for medically unnecessary lab tests to bolster reimbursements. The whistleblower received 17% of the settlement amount for his efforts in the case.

From January 2020 through October 2020, Gamma and the Murphys caused, and subsequently submitted claims to Medicare for polymerase chain reaction (PCR) urinalysis laboratory tests that were not medically necessary and were not ordered by physicians. When physicians would order a urinalysis with culture and sensitivity (C&S), or a C&S by itself, Gamma programmed its systems to automatically order a urinary tract infection (UTI) panel of tests as well, with no way to opt out. Medicare was then billed for these medically unnecessary tests, which cost much more than a urinalysis with C&S. The tests Gamma submitted cost Medicare $584, compared to the proper cost of $11. Physicians caught the extra testing submitted in addition to what they ordered and alerted Gamma in March 2020, expressing concerns about the high cost and that these tests were not medically necessary, but they were ignored.

The Principal Deputy Assistant Attorney General, head of the Justice Department’s Civil Division, admonished Gamma and the Murphys’ actions, stating, “Laboratories are permitted to bill federal healthcare programs only for medically necessary tests that are actually ordered by physicians … The department will continue to hold accountable those who seek to misuse federal healthcare programs for their own financial gain.”

The U.S. Attorney for the Eastern District of Missouri gave a special shoutout to the whistleblower, “for bringing his concerns forward … As a result, Gamma and its owners who were responsible for this fraud will not be able to participate in federal health care programs for 15 years, and a large sum of money is being returned to Medicare.” The whistleblower, Bradley Bibb M.D., is a physician and owner of healthcare clinics that worked with Gamma for its laboratory testing. Bibb was awarded $2,315,342.23 of the settlement amount.

Overbilling, upcoding, unbundling, excessive billing, and billing for medically unnecessary services are types of fraud that industry insiders are uniquely poised to report, as was the case with the physician whistleblower reporting this laboratory testing scheme. Laboratory fraud threatens patients’ trust that healthcare providers are choosing the most appropriate tests and also wastes taxpayer funds. Whistleblowers can report laboratory fraud under the False Claims Act.

If you would like to report healthcare fraud, including Medicare, Medicaid, or TRICARE 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. 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 was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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