The United States District Court for the Eastern District of Kentucky has entered an agreed judgment for $4.9 million, in favor of the United States and against AccuLab, LLC d/b/a Thoroughbred Diagnostics, holding the lab liable for submitting false claims for urine drug testing services to the Medicare and Kentucky Medicaid programs. Relatedly, the United States entered into a settlement agreement with Edgewater Recovery Center, LLC, the drug rehabilitation facility that caused the submission of those false laboratory claims, to resolve its own False Claims Act liability. Pursuant to that settlement agreement, Edgewater will pay the Government $2.2 million. Edgewater operates residential and outpatient drug rehabilitation facilities in multiple locations in Kentucky. The Government alleged that Edgewater requested the same complex panel of urine drug tests for all its patients on a weekly basis, without considering whether individual patients needed them. In typical cases, Edgewater did not even use the results of these expensive tests for the patients’ medical diagnosis or treatment.
Thoroughbred is a clinical laboratory based in Bowling Green, Kentucky, that performed urine drug tests for Edgewater’s patients. The Government alleged that Thoroughbred performed the urine drug tests requested by Edgewater and billed them to Medicare and Kentucky Medicaid, despite knowing the tests were not typically used for patients’ medical diagnosis or treatment. The Government further alleged that Thoroughbred billed for urine drug screens — a less complex test — performed on Edgewater specimens without a proper medical order requesting the test. As a result, Thoroughbred improperly received substantial payments from Medicare and Kentucky Medicaid.
