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The government’s settlement last week with Millennium Health, LLC for $256 million is just the latest in the nationwide crackdown by federal and state authorities on lab-testing companies. Millennium Health, based in San Diego, CA, is the country’s largest lab. The $256 million settlement resolves claims by whistleblowers, the federal government, 29 states and the District of Columbia, that Millennium billed for unnecessary lab tests and provided doctors illegal kickbacks for referrals. The company will also enter into a five-year Corporate Integrity Agreement with the Department of Health and Human Services and replace various members of its Board of Directors with new independent members. In addition, the settlement requires Millennium to file for Chapter 11 by November 10 if it plans to restructure its debt.

The allegations included violations of the False Claims Act for billing medically unnecessary urine drug and genetic testing for more than seven years. According to the government, Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment for each patient. The government also alleged that Millennium violated the Stark and Anti-Kickback Laws by providing free point of care urine drug test cups to physicians with the expectation that those physicians would return the urine specimens to Millennium for additional testing.

Millennium’s settlement with the government will also resolve eight individual qui tam whistleblower lawsuits filed against the company. The whistleblowers will collectively receive nearly $32 million of the $256 million settlement. This amount does not include additional attorney’s fees that Millennium will likely owe to attorneys for each of the whistleblowers, as provided under federal law.

The Millennium settlement follows government settlements last April with Health Diagnostics Laboratory, Inc. of Richmond, VA (HDL), and Singulex Inc. of Alameda, CA, in which HDL agreed to pay $47 million and Singulex agreed to pay $1.5 million to resolve alleged violations of the False Claims Act and Anti-Kickback statute. Both companies also agreed to enter into corporate integrity agreements with the Department of Health and Human Services. At the same time the government announced its settlements with HDL and Singulex, it announced its decision to intervene in similar whistleblower lawsuits against another laboratory, Berkeley HeartLab; a marketing company, BlueWave Healthcare Consultants Inc., and its owners and former CEO personally.

These actions emphasize the importance of maintaining a strong compliance program and regularly reviewing your billing practices. Given the complexities and vulnerabilities providers face with whistleblowers, regulators, and prosecutors in today’s healthcare environment, providers are strongly encouraged to take all steps necessary to ensure their practices will pass muster with an ever-more aggressive government presence.

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