Labcorp and University Health System (UHS) have collectively agreed to pay nearly $389,000 to settle allegations that they violated the False Claims Act by delaying the submission of physician orders for some lab tests by Caris Life Sciences to improperly bill Medicare for the tests.
In a statement, the U.S. Department of Justice (DOJ) said that filed documents showed that between March 2012 and November 2023, UHS and Labcorp, through Labcorp Tennessee, delayed the submission of physician orders from the University of Tennessee Medical Center, which UHS operates, by either holding orders for Caris testing for submission or canceling and resubmitting orders until 14 days after a Medicare beneficiary's discharge from the hospital to circumvent Medicare's date of service rule.
During the period in question, Medicare's date of service rule, known as the "14-day rule," prohibited laboratories from separately billing Medicare for tests ordered within 14 days of the patient's discharge from a hospital stay. If the test was performed within the 14-day window, the lab was required to bill the hospital. If the test was performed more than 14 days after discharge, the 14-day rule allowed labs to bill Medicare directly.
The DOJ said that Labcorp and UHC violated the date-of-service rule, knowingly causing the submission of false claims for reimbursement to Medicare. The agency added that UHS and Labcorp cooperated with the investigation. Caris agreed in June 2022 to pay $2.9 million in the Eastern District of New York for related allegations on a nationwide scale. The DOJ also noted that the settlement resolves in part a lawsuit filed under the whistleblower provisions of the False Claims Act; Kim Vo, as the whistleblower, received nearly $74,000 from the settlement.
