NEW YORK — The US Attorney's Office for the Eastern District of Kentucky on Thursday said that Kentucky-based clinical laboratory Bluewater Toxicology has agreed to pay $1.25 million to settle civil allegations that it submitted false claims for urine drug testing services.
The US Department of Justice alleged Bluewater had submitted claims to Medicare, Kentucky Medicaid, Indiana Medicaid, TRICARE, and CHAMPVA misrepresenting the number of drug classes tested through its urine testing services between 2016 and 2018. Specifically, the lab had submitted claims for urine tests of 22 or more drug classes but had actually tested for fewer, securing higher reimbursements than it should have received.
The DOJ had also charged that from early 2016 to 2017 Bluewater submitted certain claims without sufficient documentation to support the treating medical physician’s intent to order the test that was billed, and that between 2014 and 2016 the lab billed Medicare for specimen validity testing even though Medicare guidance states that specimen validity testing should not be separately billed.
The DOJ said that because Bluewater self-disclosed its misconduct, it was able to resolve its liability for only 1.5 times the amount of monetary loss caused by its false claims.