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18 Sep 13 LabCorp Accused of Medicaid Fraud in Virginia

LabCorp (Laboratory Corporation of America Holdings) has been hit with a whistle-blower federal lawsuit alleging the laboratory services company defrauded Virginia’s Medicaid program by billing it at much higher rates than other customers, according to a recently unsealed complaint filed in federal court on September 9th.

Laboratory Corporation of America Labcorp Medicaid FraudRelators Hunter Laboratories LLC and its founder Chris Riedel contend that LabCorp made false claims for payment of Medicaid-covered laboratory tests by claiming that the fees they charged to Medicaid were no higher that the maximum allowed under Virginia regulations.

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As a participating Medicaid provider, LabCorp is required to provide services to Medicaid patients at their most favorable rates, but they repeatedly defrauded Medicaid by billing the program for fees well in excess of their lowest costs, according to the complaint.

For example, LabCorp, the Relators say, provided volume-based discounts to members of the Premier Inc. purchasing collective, resulting in discounted fees that are way below what LabCorp has billed to Medicaid.

“This suit calls defendants to answer for defrauding Virginia’s taxpayers and compromising the welfare of Medicaid beneficiaries,” the Relators said.

Additionally, for some tests, rates for private customers have been discounted well below costs, but LabCorp nevertheless has an interest in keeping those rates low in order to prevent any other laboratories from gaining a piece of the market, according to the complaint.

“In other words, by using the publicly funded Medicaid program to subsidize private discounts, the larger and better established laboratories have cornered much of the market for themselves,” the complaint said.

The suit alleges violations of the Virginia Fraud Against Taxpayers Act. The Relators are seeking civil penalties and treble damages.

Representatives for LabCorp did not immediately respond to requests for comment on Wednesday.

Riedel and Hunter have won big in cases against LabCorp before. In 2011, LabCorp agreed to pay $49.5 million to settle a California lawsuit alleging it illegally overcharged Medi-Cal for laboratory tests and gave kickbacks in exchange for Medi-Cal referrals.

The suit originated with a qui tam complaint also filed in 2005 Riedel and Hunter alleging that LabCorp and others had systematically overcharged Medi-Cal over a 15-year period. In March 2009, then-California Attorney General Jerry Brown announced that the state had intervened in the suit.

 

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28 Jul 13 Labcorp Scamming Federal Government

LabCorp ScamAndrew Baker, the former CEO of Unilab and current CEO of Huntington Life Sciences, has written an article for The Huffington Post in which he asks the federal government to stop LabCorp and another lab company from continuing to scam the Medicare and Medicaid programs of billions of dollars.

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Mr. Baker had previously filed a whistleblower lawsuit against LabCorp in 2007 alleging that LabCorp violated the federal False Claims Act and Anti-Kickback Statutes.  Those case is still in court.

In the article he estimates that LabCorp and the other lab have cost taxpayers $15 billion since 1996 in the form of false claims stemming from illegal kickbacks to Aetna, Cigna, United Healthcare and Blue Cross.

The claims are that Labcorp is breaking federal laws by deeply discounting lab fees to private insurance companies, sometimes charging them for laboratory tests even below their costs. In exchange, the insurance companies pressure doctors in their networks to send all of their patients’ lab work, including Medicare and Medicaid patients, to LabCorp.

He claims that Labcorp funds the kickbacks, in the form of lower lab fees for private insurance companies, by charging Medicare and Medicaid patients the highest possible fee instead of offering them the lowest charged price, and by pressuring doctors to send all of their lab work exclusively to Labcorp. Other categories in Medicaid and Medicare require that the government be charged the lowest charged fees by a provider.

Mr. Baker also mentions LabCorp’s $50 million settlement with the state of California for overcharging California’s Medicaid program and for providing kickbacks to physicians for referrals.

As a result of his article, pressure is increasing for government intervention in laboratory pricing for government programs.  He advocates for clarification of the intent of current federal law that would require laboratories to charge Medicare and Medicaid their “best price”, just as California has already done.  This would require that Laboratory Corporation of America can only charge Medicare and Medicaid the lowest price they charge private insurance companies or HMOs. Which in turn means a massive hit to Labcorp’s bottom line. It would also open up the market to smaller labs which don’t have the multi-tier, lower than cost pricing intended to put them out of business. Such a hit to Labcorp’s financials would tumble their stock (NYSE: LH).

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15 Jan 12 LabCorp Under Investigation for Medicaid and Medicare Fraud

LabCorp Medicaid and Medicare FraudLabCorp has been sued and is under Federal investigation for Medicaid and Medicare fraud.  In addition, it’s under scrutiny by the U.S. Senate Finance Committee who is investigating Medicare and Medicaid fraud. Laboratory Corporation of America was ordered to hand over its financial records to the U.S. Senate.

A lawsuit was filed on behalf of the Federal government that claims LabCorp operated a “pull-through” scheme to force doctors covered by insurers to use LabCorp for all medical testing viagra uk buy. The suit claims LabCorp (NYSE: LH) offered illegal discounts to doctors in exchange for referring all their patients who need laboratory testing to the company.  According to federal anti-kickback laws, it’s illegal for health care companies to directly or indirectly compensate other parties to encourage them to order any service paid for by the federal health care programs.

Under federal law, companies can’t charge or participate in the Medicare or Medicaid program if they violate federal laws. The suit claims LabCorp charged Medicaid and Medicare more than $1 billion, which is about 20% of the companies total income. If LabCorp is found guilty they will not be allowed to conduct lab tests on anyone covered by Medicaid and Medicare, which is a large portion of LabCorps testing income.

On other news, LabCorp secured a new credit line of $1 billion. What a coincidence.

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08 Mar 10 LabCorp Under Investigating by the U.S. Department of Labor

Department Of Labor Compalint Against LabCorpThe United States Department of Labor is investigating Labcorp for not being in compliance with their affirmative action plan and for discriminating against certain sectors of the population. In a recent letter received by LabCorp Sucks from a former employee, the U.S. Department of Labor, Employment Standards Administration’s Office of Federal Contract Compliance Programs requested that their Jacksonville, Florida office consider the allegations made by the former employee when conducting future compliance evaluations of Laboratory Corporation of America.

If Laboratory Corporation of America (LabCorp) is found to not be in compliance and fails to correct the problems, they can be sanctioned and could even be restricted from participating in the Medicaid and Medicare program, two major income sources for the Laboratory company. LabCorp can also be prohibited from participating in other government programs, including the CHAMPUS program (The Civilian Health and Medical Program of the Uniformed Services) that provides laboratory services to government employees, and to Veterans Administration program beneficiaries. LabCorp currently contracts with all these government programs to provide reference laboratory services to program participants. Since many HMOs that serve the beneficiaries of these federal programs also contract with LabCorp, the HMOs would also be restricted from using LabCorp. The loss in business could be in the hundreds of millions and could be catastrophic to LabCorp stock (NYSE: LH).

LabCorp’s discrimination problems have been well known to company insiders. The company has various lawsuits pending and has had to settle others by paying out millions. In a recent Florida case, LabCorp even had to fire the law firm representing them after accusations of obstruction of justice by the firm.

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16 Feb 10 LabCorp Reports Profits But Its Future Remains Cloudy

Laboratory Corporation of America (LabCorp – New York Stock Exchange Symbol LH) recently reported an increase in fourth-quarter net earnings to $142.7 million, as compared to $118.1 million for the 4th quarter of 2008. The increase in earning were due partly to a gain of $21.5 million from resolving state tax issues and realizing foreign tax credits.

LabCorp’s total revenues for the fourth quarter rose to $1.17 billion, up from $1.12 billion the year before. For the full year, the company had profits of $543.3 million, up from earnings of $464.5 million in 2008. The increase also includes all the income from the labs that Labcorp has acquired.

LabCorp CEO Dave KingLabcorp also announced that it will be spending $250 Million to buy back shares of their own stock. Labcorp’s Chairman and CEO David King said “ We remain optimistic about the growth opportunities that lie ahead for us in 2010, and we are well positioned to capitalize on them.”  I highlight the word lie because while he was making the statement, he was filing with the Securities and Exchange Commission that he had just sold shares of LabCorp stock and pocketed over $171,960 in profits. You would think that when the head of a company announces positive results and claims to be “optimistic about the growth opportunities” he would be buying stock, not selling it. But then he owns lots of LabCorp stock and could have sold for other reasons.

US Department of Labor Investigation of LabCorpOne thing that LabCorp CEO David P. King didn’t boast about is that of a rumored investigation of LabCorp by the US Department of Labor, Employment Standards Administration, Office of Federal Contract Compliance Program. According to posts in CafePharma.com, LabCorp’s Florida operations are in trouble. They had to settle an employment lawsuit at a rumored cost of about $2.7 Million. In addition, they have a pending Federal lawsuit from a former employee that has not gone too well for them. With allegations of witness tampering and obstruction of justice, LabCorp has had to fire the law firm that was handling the case. The posts include the following:

OFCCP would like to hear from those who have been discriminated against based on a protected characteristic. (personal info removed) A formal recommendation has been made for an investigation of LCA Florida. Those who aren’t afraid to get their hands dirty, write:

US Department of Labor
Employment Standards Administration
Office of Federal Contract Compliance Program
Charles E Bennett Federal Building
400 West Bay Street
Room 939
Jacksonville, Florida 32202

or call:

(904) 351-0551

SUBJECT: LABCORP CONDUCT IN FLORIDA.

 All correspondence is confidential. 

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21 Nov 09 LabCorp Getting More Government Money

Just last month, LabCorp reported that they made $131.4 Million dollars in profit for the latest quarter, on revenue of $1.19 Billion. That was a 17% increase in profits as compared to the same quarter last year. Obviously LabCorp stock (NYSE: LH) went up to a new yearly high and all the senior executives high-fived each other.

North Carolina Property of LabcorpWell that was last month. Just a few days ago Labcorp went to the state and local governments in North Carolina for a handout of taxpayer money.  LabCorp wants to consolidate its billing operations and if it selects Greensboro as the location of the new facility, it would receive nearly $900,000 in taxpayer money. That’s free money from the taxpayers that will never be repaid.

The Burlington-based company is reportedly considering moving its billing operations from 24 sites across the country to one location in Greensboro or in Danville, Virgina. On Thursday, Guilford County commissioners approved giving the company $248,791 of tax payers money. The city of Greensboro also is offering $373,000. North Carolina would grant Labcorp $275,000 of taxpayer money. That’s a total payoff of $896,791 of taxpayer’s money. The excuse the elected officials are using is North Carolina’s unemployment rate, which is up to 11% and above the national average. This is the ninth straight month the state’s unemployment rate has reached double digits. So what is the government doing handing out free money to a company that just made over $131 Million in the last three months?

So as I see it, a cash strapped state, county and city have decided to payoff LabCorp, a company that made over $131 Million in profits over the last three months, to move their billing operations to their region. It is obvious that LabCorp threatened to move the operation to Virginia in order to get the cash from the taxpayers of North Carolina. I would like to know how many of the elected officials involved in the decision have, or will receive political contributions from LabCorp? Who knows what LabCorp will ask for next? How about adding the following motto to the state’s seal “Property of LabCorp.”

Location of the Greensboro-Winston-Salem-High Point CSA:      Greensboro     Winston-Salem     Thomasville-Lexington     Burlington     Mount Airy

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12 Apr 09 LabCorp’s HIPAA Violation

Here’s a recent story from the Winston-Salem News. LabCorp’s clear violation of the HIPAA laws is of grave concern. Under the Health Insurance Portability and Accountability Act, releasing medical information to someone that has not been authorized to receive it is punishable by up to $10,000 per incident and prison time. The only problem is that out of tens of thousands of complaints filed, the government has fined just a handful. Well here’s the LabCorp HIPAA violation, which is probably happening on a daily basis.

WINSTON-SALEM, N.C. — April 11, 2009, A Triad medical company said it mistakenly faxed almost a dozen pages of personal patient information to the wrong number.The lab test results were sent from LabCorp, and were meant to go to Winston-Salem Health Care. Instead, they went to Leigh Ambruso’s home insurance office.

“I don’t know how to read test results,” she said. “I know enough to know I wasn’t supposed to have this information.”

For six days LabCorp sent information from about 12 patients to Ambruso’s fax machine. Originally, she said, she didn’t think anything of it. “I just want people to know this is happening,” she said.

But the faxes kept coming. Ambruso said she explained the error to someone at Winston-Salem Health Care who was supposed to get the information. “She said, ‘Do me a favor and fax them to me,'” Ambruso said.

She said she finally had enough and realized the fax was violating the Health Insurance Portability and Accountability Act (HIPAA). “I said, ‘If you send me one more fax, I’m going to call the patient and tell them I have their personal information,'” Ambruso said.

One of the patients….William Dull said he was anxiously waiting on results to determine if his cancer remained in remission. “It’s very upsetting,” Dull said. “It’s not being handled like it should be.”

No one at LabCorp would talk on camera. The company eventually responded.

“The fax number has been corrected in our computing systems to prevent similar incidents in the future,” the company said in a statement.

A Winston-Salem Health Care representative said that the company takes the security and confidentiality of patient information very seriously. “We appreciate the caller’s efforts to bring this situation to LabCorp’s attention so that it could be addressed,” a company representative said. Winston-Salem Health Care said it is still investigating the mix-up.

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09 Oct 08 U.S. says LabCorp Ovarian Cancer Test Sales are Illegal

The United States Food and Drug Administration issued a letter to LabCorp warning them that they are in violation of the law. LabCorp doing illegal things brings up their checkered past, when they were charged with fraud in the LabScam investigation.

The FDA warning letter and possible criminal and civil action against LabCorp could be the beginning of the end for Laboratory Corporation of America. I say this because as one government agency moves against them, there are possibly other government agencies that might step up to further investigate other allegations against the company. It’s about time that this regulatory oversight process start. For too long LabCorp has focused on the buck as opposed to the law and the required quality standards. In my own opinion, it is a company that is out of control.

Here’s the FDA story:

WASHINGTON, Oct 8 (Reuters) – Laboratory Corp of America (LH.N: Quote, Profile, Research, Stock Buzz) is violating the law by selling an ovarian cancer screening test without regulatory approval, U.S. health officials said on Wednesday.

The OvaSure test does not fall in a category that can be sold without prior clearance from the agency, the Food and Drug Administration said.

“Because you do not have marketing clearance or approval from the FDA, marketing OvaSure is in violation of the law,” the agency said in a letter dated Sept. 29.

The agency told the company to “take prompt action to correct these violations.”

LabCorp spokesman Eric Lindblom said the company was “disappointed” by the letter.

“We are currently in discussions with the FDA over the next steps and of course we share the FDA’s determination to assure patients are protected,” he said.

The company started selling the blood test in June, saying it could detect early-stage ovarian cancer in high-risk women.

The FDA letter was posted on the FDA website. You can read the full letter by clicking here.

LabCorp shares (NYSE: LH) fell nearly 1.8 percent today to close at $60.63 on the New York Stock Exchange.

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03 Sep 08 LabCorp in Trouble with the U.S. FDA – Their testing “may harm the public health”

This is a recent article about LabCorp and their practices. The United States Food and Drug Administration believes that LabCorp’s testing “…may harm the public health.” Shame on you LabCorp for putting money before patient’s health.

The US Food and Drug Administration is looking more closely at an ovarian cancer test from Laboratory Corporation of America after deciding that the existing data did not support the test’s commercial use.

 
The FDA Office of In Vitro Device Evaluation and Safety has asked Labcorp to discuss with the agency the utility of its OvaSure Yale test, after it learned that the performance characteristics of the test were based on research that is not representative of the intended pool of patients.
 
In a letter to Labcorp dated August 7, OIVD Director Steve Gutman wrote that the scientific community would not view the study as sufficient to establish performance characteristics for high-risk women who may have ovarian cancer.
 
“Based on our review of your promotional materials and the research,” Gutman wrote, “… we believe you are offering a high risk test that has not received adequate clinical validation, and may harm the public health.” Gutman told Labcorp that OIVD would like to talk to the company about offering the test, and any other strategies the company may have for validating the test.

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21 Jul 08 Lots of LabCorp Related Emails

I’ve received dozens of emails related to problems and complaints against LabCorp. From those who have filed lawsuits against them to physicians that are fed up with service related issues. I will respond to them all this week. Since this is something that I do on the side because of the poor attitude of LabCorp company manager and executives, I can only do it during down time. Sorry about that.

The retail business has many dynamics. It’s a business that I know well. Relating these principles to LabCorp’s operation, it is hard to believe that there are so many patients that will never set foot in a LabCorp center again. Yet the company and its executives do not seem to be doing anything about it. It’s a real shame how a company can believe that they are so omnipotent that they can do whatever they want. Our country’s laws and regulations are established for these particular instances. They will eventually catch up to LabCorp. The government agencies will move in and that’s when you will see them change.

I also believe that the tough economy will severely affect LabCorp and their view of the customer. In my opinion, they see the customer as the HMO, insurance company or 3rd party payer. The patient is seen as a secondary factor when in fact it is all about the patient. Poor results or worst yet, no results, will not only anger the patients but also the payer as the patient will start complaining. Why do these managers and executives not see this? Oh well, they will when the 3rd party payers start cancelling contracts because of malpractice lawsuits. And the doctors that send them the specimens for results? They will eventually get tired of poor results that affect the lives of their patients. I believe that doctors generally care more about their patients than the lower prices offered by LabCorp. That will also work against LabCorp. When will this company wake up to reality?

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