Precision Toxicology, doing business as Precision Diagnostics, has agreed to pay $27 million to resolve alleged violations of the False Claims Act and similar state statutes for billing Medicare, Medicaid and other federal healthcare programs for medically unnecessary urine drug tests, and for providing free items to physicians who agreed to refer expensive laboratory testing business to Precision. Precision, headquartered in San Diego, is one of the nation’s largest urine drug testing laboratories. In the settlement agreement, the United States alleged that Precision systematically billed federal healthcare programs for excessive and unnecessary urine drug testing from Jan. 1, 2013, through Dec. 31, 2022. In particular, the United States contended that Precision caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which were, in effect, standing orders that caused physicians to order a large number of tests without an individualized assessment of each patient’s needs. This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury.
