The owners of a Poplar Bluff lab have agreed to pay $13.6 million for allegedly billing Medicare for lab tests that were not ordered or medically necessary.
Officials report Gamma Healthcare was regularly turning $11 urinalysis tests into a $584 payday by not allowing physicians to opt out of the second, more expensive test.
Doctors began to express concern in 2020 that the lab was performing tests they had not ordered, and which were not medically necessary.
Because of the concerns brought forward by a whistleblower, Gamma and three of its owners, Jerry W. Murphy, Jerrod W. Murphy and Joel W. Murphy have reached an agreement to resolve allegations they submitted or caused the submission of claims to Medicare for lab tests that were not ordered by health care providers and were not medically necessary, according to information released Wednesday by the U.S. Attorney’s Office.
Gamma, Jerry W. Murphy and Jerrod W. Murphy also agreed to a 15-year exclusion from participating in federal health care programs.
The allegations come from Jan. 1-Oct. 31, 2020.
“Gamma and the Murphys submitted or caused to be submitted claims to Medicare for medically unnecessary polymerase chain reaction urinalysis laboratory tests that were not ordered by treating physicians,” the U.S. Attorney’s Office reported. “When a physician ordered a urinalysis with culture and sensitivity or just a (culture and sensitivity), Gamma automatically performed, and submitted claims for payment to Medicare for, a urinary tract infection panel of tests by PCR.”
Medicare reimbursements for the UTI PCR Tests were significantly higher than reimbursements for a urinalysis with culture and sensitivity.
A urinalysis with culture and sensitivity was an $11 payment, while the UTI PCR paid an additional $573.
“Gamma’s requisition forms were structured in a way that did not allow physicians to opt out of the UTI PCR Tests,” reports state. “Physicians expressed concerns to Gamma about the UTI PCR Tests as early as March 2020, including concerns that they did not order the tests, that the tests were expensive and that they were not medically necessary.”
Laboratories are permitted to bill federal healthcare programs only for medically necessary tests that are actually ordered by physicians, said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
“The department will continue to hold accountable those who seek to misuse federal healthcare programs for their own financial gain,” Boynton said.
Officials thanked a whistleblower for bringing his concerns forward, according to U.S. Attorney Sayler A. Fleming for the Eastern District of Missouri.
“As a result, Gamma and its owners who were responsible for this fraud will not be able to participate in federal health care programs for 15 years, and a large sum of money is being returned to Medicare,” Fleming said.
“Health care providers who cause the submission of Medicare claims for medically unnecessary services pose a significant risk to the program and the patients who rely on it,” said Special Agent in Charge Linda Hanley of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG works diligently with our law enforcement partners to hold accountable individuals who, to satisfy their own greed, exploit federal health care programs.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Bradley Bibb M.D., an Ash Flat, Arkansas-based physician who owns a number of health care clinics and provided services to patients for whom Gamma performed laboratory tests. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Bibb v. Gamma Healthcare Inc. et al., No. 1:20-cv-00250-SNLJ (E.D. Mo). Bibb will receive $2.3 million of the proceeds from the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Missouri, with substantial assistance from HHS-OIG and FBI. Trial Attorney Elizabeth J. Kappakas of the Civil Division’s Fraud Section and Assistant U.S. Attorney Suzanne Moore for the Eastern District of Missouri handled the matter, with the assistance of Financial Analyst Sheryl Paynter of the Civil Division.