Calloway Laboratories has agreed to pay nearly $4.7 million to settle allegations that it defrauded the West Virginia Medicaid program by overbilling for urinalysis testing. The money will go both to West Virginia and the federal government, which had investigated Calloway jointly. It is the largest sum ever recovered from a provider in West Virginia history. “By resolving this matter Calloway eliminates the financial uncertainty associated with litigation and is now well-positioned to focus on advancing its commitment to provide state-of-the-art clinical toxicology laboratory services to patients and providers nationwide,” the Woburn, Mass.-based Calloway said in a statement it posted on its Web site late last month. The lab had been accused by regulators of overbilling Medicaid by billing for medical reviews and pathology services it never performed. The alleged overbilling occurred between 2009 and 2013. “Calloway Labs performed a type of medical review with every urine drug screen. Medical review is not covered by Medicare or West Virginia Medicaid. Medicare and West Virginia Medicaid paid claims for the medical review because Calloway submitted them under the code for covered pathology services,” U.S. Attorney Booth Goodwin said in a statement issued by his office. Calloway’s brief statement indicated the issue […]
Calloway Laboratories has agreed to pay nearly $4.7 million to settle allegations that it defrauded the West Virginia Medicaid program by overbilling for urinalysis testing.
The money will go both to West Virginia and the federal government, which had investigated Calloway jointly. It is the largest sum ever recovered from a provider in West Virginia history.
“By resolving this matter Calloway eliminates the financial uncertainty associated with litigation and is now well-positioned to focus on advancing its commitment to provide state-of-the-art clinical toxicology laboratory services to patients and providers nationwide,” the Woburn, Mass.-based Calloway said in a statement it posted on its Web site late last month.
The lab had been accused by regulators of overbilling Medicaid by billing for medical reviews and pathology services it never performed. The alleged overbilling occurred between 2009 and 2013.
“Calloway Labs performed a type of medical review with every urine drug screen. Medical review is not covered by Medicare or West Virginia Medicaid. Medicare and West Virginia Medicaid paid claims for the medical review because Calloway submitted them under the code for covered pathology services,” U.S. Attorney Booth Goodwin said in a statement issued by his office.
Calloway’s brief statement indicated the issue was a disagreement about how services were ordered and performed and that the settlement did not include an admission of any wrongdoing. It also hinted the blame should be attributed to its prior management.
In March 2012 Calloway agreed to pay $20 million to Massachusetts regulators to settle charges of paying kickbacks in order to generate unnecessary urine tests for the state’s Medicaid program. Later that year, Calloway’s former chief executive officer and chief operating officer pleaded guilty to state fraud charges.
Takeaway: It can take years for a health care provider to get the misdeeds of prior managers behind them.
