Andrew 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.
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).
Tags: billing, federal government, Government Investigations, lab, labcorp, Labcorp Criminal, LabCorp Stock, labcorp unethical, labcorp whistle blowers, laboratory Corporation of America, laboratory test, lawsuits, medicaid, medicare, NYSE:LH
LabCorp 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.
Tags: billing, federal investigation, Government Investigations, health care, kickback, labcorp, Labcorp Criminal, labcorp unethical, Labcorp Wrongdoings, laboratory Corporation of America, medicaid, medicaid fraud, medicare
I received this email from Anne. She’s very upset that LabCorp is billing her for tests that she declined when she was at the LabCorp center in Texas. In addition, the test that she specifically approved because it was to be paid for by Medicare was not performed. It’s not clear if the techs at the center made the mistake or if it was the laboratory. Whoever may have made the errors, it was not Anne and she is not required to pay. Instead of resolving the problem promptly, LabCorp continues their collection process. A suggestion to LabCorp, it’s never too late to fix a mistake. Based on the amount of complaints on this blog, I recommend the big eraser. It’s available by the case.
Since Anne is a Medicare recipient, she will be taking this matter directly to the government. I’m confident that this matter will be resolved and she will not have to pay. Even though Anne gave us authority to print her personal information, her letter was redacted for privacy purposes.
May 11, 2010
ATTN: PATIENT SERVICES
Laboratory Corporation of America Holdings
PO Box 2240
Burlington NC 27216-2240
Ref: Invoice 115XXXXX
I attended your facility on March 29, 2010 with a request for services from my doctor’s office.
At your facility, a lady processed my paper-work. She took copies of:
- My Medicare card
- My insurance identification card
- My Mutual of Omaha pink physician sticker
- My TX driver’s license
She then informed me that two of the blood tests requested by my doctor:
- 80061 – LIPID PANEL
- 84443 –TSH
…would not be covered by Medicare. She printed out your Form CMS-R-131, listing those two tests and instructed me to choose and check an option, then sign and date the form.
I checked Option 3. “I don’t want the laboratory test(s) listed above. I understand with this choice I am not responsible for payment and I cannot appeal to see if Medicare would pay.”
I then signed and dated the form and the lady provided me with a copy. A copy of this form is included with this letter.
Your representative assured me that the remaining test requested by my doctor was a procedure covered by Medicare. Had she informed me otherwise, I would have most certainly declined that test as well.
Subsequently I was contacted by my doctor’s office to discuss the results of the blood test and they provided me with a copy of these results.
Patient Service Center Request LCM Req #: 50057XXXXXX (Copy enclosed).
The two test results were for the two procedures I had declined:
- 80061 – LIPID PANEL
- 84443 –TSH
NO OTHER TESTS HAD BEEN CARRIED OUT.
I then received your Invoice # 115XXXXX billing me for the two procedures I had specifically declined, PLUS procedures you had not even carried out.
Why am I being billed? As a result of my complaint, all I have received so far from your Patient Customer Service is a completely pointless form letter, clearly assuming I’m not particularly bright and explaining that the bill I am questioning is for clinical laboratory services performed at the request of my physician.
I have been checking up on your company online and I wasn’t surprised to find pages of complaints against you on every consumer protection website going. People have even gone so far as to dedicate websites to exposing Lab Corp.
I ask that you resolve this issue immediately otherwise I shall send copies of everything to the Texas Attorney General’s Office in Austin, Texas. In view of all the government litigation against you that I’ve been reading about, I’m sure they will be more than happy to help me.
- Copy of front and back of my Mutual of Omaha Insurance Identification Card.
- Pink Mutual of Omaha Physician Sticker
- Copy of your FORM CMS-R-131 clearing indication the declined procedures
- Copy of LabCorp Patient Service Center Request LCM Req # 50057XXXXXX listing the 2 test results submitted to my doctor.
LabCorp (Laboratory Croporation of America) shares of stock fell more than 2% on Tuesday, March 23rd after a Deutsche Bank analyst downgraded the company’s stock (NYSE: LH) from “buy” to “hold.” LabCorp is the second largest US commercial reference lab. One of the key factors cited for this change was lower than expected First Quarter volume. Physician office visits have been below the trend line for the first two months of 2010 and physician offices are responsible for a significant percentage of LabCorp’s test volume. It is estimated that for every 1% increase in the unemployment rate, 2.5 million Americans lose their health care benefits.
Other factors influencing the recommendation were weather, intensifying competition and possible pricing pressures from public payors. The analysts reported that “Downside risks: competition, Medicare / Medicaid / VA cuts, weak demand. Upside risks: accretive M&A and share buyback, higher volume growth.”
Financial analysts in Wall Street have downgraded LabCorp (LH on the New York Stock Exchange), citing a slow down of testing volume growth and lower prices for their services. The analysts also expect a cut in Medicare payment rates and potentially weaker prices from health insurers. In addition, health care reform could lead to further rate cuts and eliminate the obscene profits that LabCorp makes on some of their niche lab tests.
Will the N1H1 Swine Flu help offset these factors? The answer is a flat out no. LabCorp won’t get much of a boost from a swine flu outbreak because flu testing is only a small part of its business.
Even though LabCorp is buying back their own shares, it may not be enough to maintain the share prices at their current levels. Laboratory Corp. of America announced that they will buy back up to $250 million of common stock under a repurchase plan approved by its directors. LabCorp purchased a total of $500 million worth of shares under its previous stock buy-back plan. About $95 million of those repurchases have taken place since the end of June.
With employee dissatisfaction, pending lawsuits and ongoing management problems, it looks like shares of Laboratory Corporation of America are heading down quickly. Some of the company’s insiders sold the shares ahead of the downgrades.
On 09/08/09 LANE WENDY E, a Director, sold 4,116 shares for $68.70 a share.
On 09/02/09 LANE WENDY E, sold 2,604 shares at $68.78 a share.
On 08/17/09 HARDISON DONALD M, the company’s Chief Operating Officer, sold 854 shares at $69.50 per share.
According to Yahoo Finance, during the past 6 months there have been no insider purchases and 5 insider sales. A total of 12,481 shares have been sold by insiders and a net 12,258,100 shares have been sold by institutions, after taking into account purchases by institutions. It seems that some of those who really know what is going on are selling.