Case of the Month: Lab Tests Play Key Role in $19 Million Detroit Opioid Scheme

A physician just pleaded guilty to ordering millions in medically unnecessary lab tests? So what else is new? Please pass the butter… Granted, stories like the Oct. 12 guilty plea of that physician in Michigan are old hat. But what makes the case highly significant is not the storyline but its playing out within the context of an opioid drug scheme. The Case The defendant in this case was a 72-year-old physician who admitted to conspiring with two other Detroit-area providers, including the owner of the Tri-County Network, in carrying out an opioid drug scheme that generated roughly $19 million in fraudulent Medicare billings. The doctor's role:

• Prescribing medically unnecessary oxycodone, opana and hydrocodone to Medicare patients, many of whom were drug addicts;

• Directing physicians to make Medicare patients who wanted an opioid prescription to first undergo medically unnecessary facet joint injections and lab tests; and

• Telling physicians to refer those services to labs, clinics and other facilities in which he had secret ownership interests.

Same Rules, New Context The takeaway from the Michigan case is its providing another illustration of how the current opioid drug epidemic is influencing the direction of federal health care fraud enforcement. This summer, the Department of Justice unleashed a potent nationwide crackdown on opioid drug abuse, both illegal and prescription. Labs and physicians are not necessarily the primary target. However, they are well within the range of potential suspects to the extent that urine testing plays a key role in detecting prescription opioid abuse. Doctors contend that medical guidelines require screening tests when prescribing pain pills. But critics contend that there is too much screening testing. And, of course, the more frequently the tests are ordered, the more they cost. None of these concerns are novel. Illegal billing of drug tests by labs, physicians and addiction treatment centers is a perennial issue for the OIG and Justice Department and played a key role in the Millennium Health case which settled for $256 million in 2015. But the volume and pace of these cases is and will continue to increase for as long as opioid drug abuse remains a centerpiece of federal policy. Recent examples include genetic testing company Proove Biosciences whose Southern California HQ was raided by the FBI in a Takedown case targeting illegal dispensing of oxycodone and opioids by Physicians Primary Care (PPC) in Indiana, and urinalysis lab Confirmatrix, which was allegedly involved in a Tennessee opiate pill mill scheme. (See "Labs In Court," NIR, September, 2017).

Takeaway: If your lab is involved in opioid drug testing, you need to be on ultra-high compliance alert.