COVID-19 testing operation accused of massive double-billing scheme

Lawsuit Social

A mobile COVID-19 testing and clinical diagnostics company in New York is accused of raking in tens of millions of dollars from the Uninsured Program for testing people who had healthcare coverage.

The U.S. federal lawsuit filed June 13 against LabQ Clinical Diagnostics, Community Mobile Testing Inc., Dart Medical Laboratory Inc., and their CEO, Moshe Landau, seeks damages and civil penalties under the federal False Claims Act. The lawsuit also seeks recovery of government funds under the common law, according to a statement released by the U.S. Attorney's Office in the Southern District of New York.

During the COVID-19 pandemic, LabQ provided COVID-19 testing for school districts and nursing homes, as well as to walk-up patients at numerous mobile locations on public streets in New York City. LabQ and Dart Medical received approximately $130 million from the Uninsured Program for COVID-19 testing, according to the complaint.

The COVID-19 testing operation is accused of double-billing the program, other healthcare programs, and private institutions for the same COVID-19 testing. Furthermore, the lawsuit alleges that, at Landau’s direction, LabQ, Community Mobile Testing, and Dart disbursed a significant portion of these funds to Landau's personal bank accounts.

Prior to seeking reimbursement for COVID-19 testing services from the Uninsured Program, testing providers were required to attest to the Health Services and Resources Administration that they had confirmed that their patients were uninsured and that no one else would pay for the cost of the COVID-19 testing.

The lawsuit alleges that LabQ and Community Mobile Testing employees frequently told patients and customers, "in sum and substance, that LabQ did not need insurance information and, in instances when LabQ possessed patient insurance information, LabQ, Dart Medical, and Landau often submitted claims."

The U.S. government intervened, in part, in two whistleblower lawsuits before U.S. District Judge Lewis J. Liman that had previously been filed under seal pursuant to the False Claims Act.

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