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UnitedHealthcare Sues Two Texas Labs for Fraud Scheme

NEW YORK (360Dx) – United Healthcare has filed suit against two Texas labs that it alleges "conned" the insurer into paying at least $44 million for improper lab claims.

The suit, which was filed last week in US District Court for the Western District of Texas, alleges that Sun Clinical Laboratories and Mission Toxicology as well as the labs' owners and other companies described as "overlapping entities," used kickbacks to induce healthcare providers to send specimens to the labs.

In addition, UnitedHealthcare accuses the labs of setting up testing centers within rural hospitals that are in-network with the insurer, and billing UnitedHealthcare from those hospital to make it appear that the hospitals were billing the insurer rather than out-of-network labs. According to the suit, when UnitedHealthcare paid the rural hospitals, the defendants instructed hospital employees to transfer 95 percent of the payment to the labs or related entities. Using the rural hospital identities, the labs filed claims that were 50 times the actual cost of testing, the suit alleges.

"United also ended up reimbursing for lab testing that was not performed, not ordered, not performed as ordered, billed by another provider (i.e., "double-billed"), and/or for which members and their providers never received the testing results," the complaint alleges.

UnitedHealthcare alleges that the labs named in the suit — Sun Clinical Laboratories and Mission Toxicology — were both Clinical Laboratory Improvement Amendment-licensed laboratories, but performed "few, if any, of the lab services at issue" and instead paid other out-of-network labs to perform the services.

The suit lists toxicology testing and allergy testing as types of testing for which the lab companies fraudulently billed. Defendants could not be reached for comment, and a UnitedHealthcare spokesperson could not immediately comment.

Aetna and Aetna Life Insurance Company last fall filed suit against the labs, alleging that the companies' fraudulent healthcare billing scheme cost Aetna $21 million. That lawsuit also alleged that the labs paid kickbacks to providers and misrepresented claims to suggest Newman Memorial Hospital was performing the testing when in fact testing what being performed by outside labs. A judge in Pennsylvania last month transferred that case to the Western District of Texas.

Last May, Blue Cross & Blue Shield of Mississippi also filed suit against the labs alleging that it paid in excess of $9.8 million in fraudulent claims to the labs and Sharkey-Issaquena Community Hospital. Aetna alleged that it received $33.8 million in fraudulent claims, but the remaining $24 million of claims have not been paid.