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Federal Investigations of Toxicology Laboratories Are on the Rise

toxicology labs

 

Dr. Nick Oberheiden, Esq.
www.federal-lawyer.com
(214) 692-2171
Including Weekends

Toxicology laboratories are receiving heightened scrutiny from the federal government as a part of a nationwide trend of aggressively investigating and prosecuting laboratories and their owners suspected of violating federal laws including the Stark Act, the Anti-Kickback Statute, and the False Claims Act. In particular, federal investigators are focusing on laboratories that test urine samples for drugs. As part of this recent trend in government law enforcement activities, federal prosecutors are increasingly seeking criminal charges against laboratory owners and operators in addition to civil sanctions against the laboratories.

What is Toxicology Fraud?

Toxicology fraud occurs when laboratories charge healthcare providers for unnecessary or excessive drug tests. For example, a drug test may be deemed unnecessary if the results are not provided in a timely manner such that they are no longer useful to the requestor. Likewise, drug tests may be deemed excessive if multiple tests are ordered for the same person within a short period of time, or if one urine sample is tested for multiple drugs and the bill is unbundled to charge the healthcare provider high premiums for each individual drug tested for. Billing healthcare providers for drug testing that never actually occurs also constitutes toxicology fraud.

Additionally, toxicology fraud occurs when laboratories compensate medical providers for referring drug testing to them. Some common examples of such kickbacks include financial reimbursements, free provision of medical equipment, or payments for sham consulting fees. Toxicology laboratories often receive referrals from drug treatment centers; therefore, government investigators are focusing increased attention on the relationships between toxicology laboratories and drug treatment centers to detect for improper compensation for the referrals.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Attorney-at-Law & Founder

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Lynette S. Byrd
Lynette S. Byrd

Former Federal Prosecutor

Partner

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Subodh Chandra
Subodh Chandra

Former Federal Prosecutor

Local Counsel

Elizabeth K. Stepp
Elizabeth K. Stepp

Partner

Roger Bach
Roger Bach
(Non-Lawyer)

Former Special Agent, OIG

Dennis A. Wichern
Dennis A. Wichern
(Non-Lawyer)

Former Special Agent-in-Charge

Chris Quick
Chris Quick
(Non-Lawyer)

Former Special Agent, FBI

Kevin M. Sheridan
Kevin M. Sheridan
(Non-Lawyer)

Retired Supervisory Special Agent, FBI

Ray Yuen
Ray Yuen
(Non-Lawyer)

Former Supervisory Special Agent, FBI

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz
(Non-Lawyer)

Former Supervisory Special Agent, FBI

What Are the Penalties for Toxicology Fraud?

Federal prosecutors may charge toxicology laboratories suspected of committing fraud either civilly or criminally, or both. Most often, civil charges are brought under the federal False Claims Act, which holds laboratories accountable for any unjustified bills presented to government healthcare programs, the Stark Law, which prohibits doctors from referring testing to laboratories in which the doctors hold a financial interest, or the Anti-Kickback Statute, which bars laboratories from compensating doctors for giving them referrals. Convictions on civil charges may result in fines, restitution, or forced participation in programs designed to prevent future fraud.

Prosecutors are also increasingly pursuing criminal penalties against the owners and operators of toxicology laboratories for healthcare fraud. If convicted of committing healthcare fraud, individuals face up to ten years in federal prison for each count they are convicted on, among other penalties such as fines and probation.

Recent Examples

  • In November 2015, five owners of a Kentucky laboratory were indicted for healthcare fraud after allegedly charging both public and private healthcare providers for urine tests that were medically unnecessary. The indictment comes almost two years after the laboratory participated in a $15.75 million settlement with the federal government related to the same activities. https://www.justice.gov/usao-edky/pr/five-former-owners-kentucky-clinical-laboratory-indicted-health-care-fraud
  • In October 2015, a nationwide laboratory services company agreed to pay $227 million to settle claims that it systemically billed federal healthcare providers for excessive and unnecessary drug testing. https://www.justice.gov/usao-ma/pr/millennium-laboratories-pay-256-million-resolve-false-billing-and-kickback-claims

What Does this Mean for You?

If your toxicology laboratory is the subject of a federal investigation, the most important thing you can do to protect you and your company is call an attorney at your earliest opportunity. An experienced attorney can help you avoid or mitigate any potential charges you are facing.

Success Stories

The attorneys of Oberheiden, P.C. are healthcare fraud defense attorneys that help clients from across the country with effective defense strategies against government investigations. Here are some representative healthcare investigations that we handled on behalf of individual and corporate clients.

  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.
  • Healthcare Fraud Investigation
    Result: No liability, case dismissed.

Free Consultation

If you would like to talk to someone who understands how to effectively defend against government investigations, you should consult with a former federal prosecutor at Oberheiden, P.C.. All inquiries are free and confidential.

Oberheiden, P.C.
Criminal Defense – Healthcare Law – Litigation
(214) 692-2171
www.federal-lawyer.com
This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden, P.C. is a Texas LLP with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

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