Laboratory Corporation of America Holdings, Laboratory Corporation of America, Labcorp Tennessee, LLC, and University Health System, Inc. have paid $388,667.17 to resolve allegations that they violated the False Claims Act by delaying the submission of physician orders for certain laboratory tests by Caris Life Sciences, Inc. to enable improper billings to Medicare for those tests.
During the relevant timeframe, Medicare’s Date of Service or “14-Day” Rule prohibited laboratories from separately billing Medicare for tests performed on specimens if a physician ordered the test within 14 days of the patient’s discharge from a hospital stay, either in an outpatient or inpatient setting.
If the test was performed more than 14 days after discharge, then Medicare’s 14-Day Rule permitted laboratories to bill Medicare directly for the test.
If the test was performed within the 14-day window, the laboratory must instead bill the hospital facility.
UHS operates the University of Tennessee Medical Center, and LCA provides clinical laboratory services through LCTN at UTMC’s outpatient laboratory.
According to filed documents, between March 2012 and November 2023, UHS and LCTN caused the delay of the submission of physician orders for Caris testing by either holding orders for submission or cancelling and resubmitting orders until 14 days after a Medicare beneficiary’s discharge from the hospital to circumvent Medicare’s Date of Service Rule, which allowed the submission of claims to Medicare.
The United States contends that, in doing so, UHS and LCTN violated the Date of Service Rule and knowingly caused the submission of false claims for reimbursement to Medicare.
UHS and LabCorp cooperated with the United States’ investigation and resolution thereof. Caris, for its part, previously agreed to pay $2.8 million to resolve allegations in the Eastern District of New York of its related conduct on a nationwide scale.
This settlement resolves, in part, a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permits private parties to sue on behalf of the government for false claims and receive a share of any recovery.
The qui tam case is captioned United States ex rel. Kim Vo v. Caris Life Sciences, Inc. et al., No. 3:20-CV-509 (E.D. Tenn.).
Relator Kim Vo received $73,846.76 of the proceeds from the settlement. UHS was not a party to the qui tam case but participated in the settlement.
