Calloway Laboratories will pay nearly $4.7 million to settle allegations that it fraudulently billed West Virginia Medicaid and the federal Medicare program. Booth Goodwin, U.S. attorney for the Southern District of West Virginia, announced the settlement May 21, calling it “the largest-ever recovery in a health care fraud case” for his office. The laboratory, based in Woburn, Mass., provided clinical laboratory services, including urine testing, for Medicare and West Virginia Medicaid, Goodwin said. But from March 2009 through April 2013, it routinely billed both using a code designated for pathology services, in addition to the code for urine drug testing, he said. An investigation by the West Virginia Medicaid Fraud Control Unit and the Department of Health and Human Services Office of Inspector General established that treating health care providers didn’t deem pathology services necessary and didn’t knowingly order the service. Goodwin said investigators determined Calloway didn’t provide pathology services, as billed, but performed a type of medical review with every urine drug screen. Medical review isn’t covered by Medicare or West Virginia Medicaid, he said. The two programs paid the medical review claims, Goodwin said, because Calloway submitted them under a code reserved for covered pathology. In a statement…
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