A Massachusetts-based laboratory will forfeit more than $1 million to settle claims it billed for medically unnecessary urine drug screens.
Massachusetts Attorney General Maura Healey said Southbridge-based Precision Testing Laboratories, Inc. and owner David Fromm, of Hull, agreed to make a payment of more than $400,000 as part of the Massachusetts settlement.
Connecticut Attorney General George Jepsen said the lab will forfeit nearly $657,000 as part of the Connecticut settlement.
The company also will be barred from participating in each state's Medicaid program for 10 years as part of the deal announced Friday.
Healey said Precision Testing Laboratories billed MassHealth, the state's Medicaid program, for expensive urine drug tests as a routine, medically unnecessary supplement to less expensive urine drug screens.
Precision Testing Laboratories did not immediately respond to an email seeking comment Sunday.
"Medicaid fraud schemes cheat taxpayers and take critical health care resources away from the people that need them most," Healey, a Democrat, said in a written statement. "We will go after cases of fraud and return the funds to the state."
Healey said her office began an investigation into the lab after the use of the tests was flagged by MassHealth.
Healey said besides the use of more expensive urine drug tests, her investigation also found that Precision Testing Laboratories ``aggressively marketed an expensive and unnecessarily complex drug testing package to sober houses, despite the fact that they knew that the tests were for residential sobriety monitoring, a violation of MassHealth regulations.''
Jepsen, also a Democrat, said Precision Testing Laboratories had promoted itself as a laboratory committed to providing urine drug testing services to those in recovery from substance abuse.
He said the lab marketed the expensive drug testing to residential drug treatment facilities and sober homes, even though they knew the facilities and homes did not provide a physician-managed drug treatment program. He said the need for drug testing at those facilities and homes was limited to ensuring sobriety as a condition of residency and that a less expensive drug test result would have sufficed.
Jepsen said the lab also submitted false claims to the Connecticut Medical Assistance Program — which includes Connecticut's Medicaid program — for expensive drug tests that were not medically necessary because the tests were not part of a physician's drug treatment program, not specifically tailored to address each individual resident's particular medical condition; and far more costly than alternative drug testing.
"Medical necessity is an important distinction in Medicaid provider agreements, and we alleged that this provider knew that it was violating its provider agreement in billing Medicaid for these expensive tests, yet did so regardless," Jepsen said in a statement.
Jepsen said as part of the settlement, Precision Testing Laboratories and Fromm have agreed to forfeit $656,912 in payments that had been suspended by the state Department of Social Services.
Of that, $394,147 represents the state's share of the funds, which will be returned to the Connecticut Medical Assistance Program. Additional funds will be returned to federal Medicaid, he said.
Jepsen said investigators from his office and Healey's office worked together on the investigation.