Attorney General Anthony G. Brown announced that his office has reached a settlement with Precision Toxicology for $27 million to resolve allegations that it billed government health programs for medically unnecessary urine drug tests and kickbacks to physicians in exchange for laboratory testing referrals. Precision, headquartered in San Diego, California, is one of the nation’s largest urine drug testing laboratories. The case originated with a Baltimore-area whistleblower complaint that prompted a complex state and federal investigation into a scheme operating within the drug testing industry, in which profits—and fraud—have increased as the opioid epidemic has spread nationwide.
In the settlement agreement, Maryland and numerous other states, as well as the federal government, alleged that Precision billed government healthcare programs for excessive and unnecessary urine drug testing from January 1, 2013, through December 31, 2022. In particular, the government plaintiffs contended that Precision caused physicians to order excessive numbers of urine drug tests, in part through use of blanket orders that caused physicians to order a large number of tests without an individualized assessment of each patient’s needs. The government plaintiffs also alleged that Precision providing free point-of-care urine drug test cups to physicians—on the condition the physicians agree to return the urine specimens to Precision for additional testing—violated anti-kickback laws.
In addition to the monetary settlement, Precision has agreed to enter into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which will allow the federal government to monitor Precision’s operations over that period, and mandate reforms and corrections as needed. Of the settlement amount, $18.2 million will be paid to the federal government. Maryland will receive $5.7 million. Other impacted states will also receive a share, including Illinois, Minnesota, Virginia, Georgia and Colorado.
