NEW YORK – The US Attorney's Office for the Eastern District of Tennessee said Thursday that Laboratory Corporation of America and University Health System (UHS) have paid $388,667.17 to resolve allegations that they violated the False Claims Act.
According to the government's allegations, Labcorp and UHS delayed the submission of physician orders for certain laboratory tests by Caris Life Sciences to enable improper billings to Medicare for those tests.
The government alleged that the parties delayed the submissions to skirt Medicare's Date of Service provision, also known as the "14-Day" rule, which prohibits labs from separately billing Medicare for tests performed on specimens if a physician orders the test within 14 days of a patient's discharge from a hospital stay either in an outpatient or inpatient setting. If the test is performed within this window, the lab must bill the hospital facility, not Medicare.
UHS operates the University of Tennessee Medical Center (UTMC), and Labcorp provides lab services at UTMC's outpatient laboratory. According to court documents, between March 2012 and November 2023, the parties delayed the submission of physician orders for Caris testing either by holding orders for submission or canceling and resubmitting orders in order to circumvent the Date of Service provision.
The settlement resolves, in part, a lawsuit filed under the whistleblower provisions of the False Claims Act. Whistleblower Kim Vo received $73,846.76 of the proceeds from the settlement.
UHS and Labcorp cooperated with the government's investigation and resolution. The claims resolved were allegations only, and there has been no determination of liability, the US Department of Justice said.
Caris previously paid $2.9 million to resolve related allegations that it violated the False Claims Act by billing Medicare for testing in violation of the Date of Service rule.