Diagnostic Testing Fraud at Labs and Imaging Providers

Diagnostic services provided by clinical labs and imaging companies can be a significant source of Medicare fraud.  From violations of the Anti-Kickback Statute for improper compensation to medically unnecessary tests, the False Claims Act provides an enforcement mechanism for the U.S. Government to recoup some of the money lost to health care fraud.

More than half of False Claims Act cases are brought by whistleblowers.  Health care professionals can earn significant rewards for providing information to the Justice Department through a qui tam lawsuit.  If you have information about fraud in a diagnostic service (clinical laboratory or X-Ray / CT Scan / MRI provider), call 1-800-590-4116 for a free, confidential initial legal consultation.

Clinical Laboratories

Medicare spends billions annually for Part B services at clinical labs, as it is the largest payer of clinical laboratory services in the nation.  Despite Medicare guidelines, laboratory fraud has been a significant problem in the health care industry.

In 2014, OIG issued a special fraud alert for compensation paid by laboratories to referring physicians and practice groups for blood collection, processing and packaging.  The alert highlighted concerns about above fair market value payments to physicians for services as well as free or below-market goods / services paid by the lab for the doctor.

A 2014 OIG report also looked at questionable billing by labs for potentially unnecessary services.  It found a significant number of labs exceeded its threshold for questionable billing practices, and these labs billed Medicare in total for $1 billion in lab services.  Another problem identified by CMS is the ordering of a bundle of tests when only one is necessary.

X-Ray Imaging

In 2011, OIG identified portable x-ray providers as a small but significant source of Medicare fraud.  More than half of the providers identified with questionable billing practices were in the Miami, Florida area.  The questionable practices involved billing transportation for two trips to a facility in the same day as well as submissions for tests ordered by non-physicians.  A separate 2016 report found that a single provider in New York billed Medicare for hundreds of thousands of dollars improperly.

MRI and CT Scans

A case against a provider of CT scans settled in 2014 for more than $10 million when, among other things, the government alleged that the company submitted claims for 3D reconstructions of CT scans that were never performed or interpreted.  Allegations of fraud in the case also invoalso arises in these tests when the testing company pays the provider for referrals.  An example of MRI fraud is the ordering of a MRI instead of a mammogram for preventative care.


Part B providers can not submit claims for payment when tests are not ordered by physicians or are not medically necessary.

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