Kickbacks between Insurers and Labs Raise Anti-Fraud Ire

Recently, United States Senators Max Baucus and Charles Grassley, known standard-bearers in the fight against fraud, opened an investigation into the Medicare practices between certain health insurers and clinical laboratories. The point of conflict revolves around the practice referred to as “pulling through,” which means that health insurers steer tests to certain labs in exchange for discounts or payments from these labs. In particular, the parties that the Senators are interested in are the clinical labs Quest Diagnostics and Laboratory Corp. of America and the health insurers Cigna, Aetna and UnitedHealth Group. Pull through arrangements would violate federal anti-kickback laws, which prohibit anyone from “knowingly and willfully receiving anything of value to influence the referral of federal health care program business, including Medicare and Medicaid.” If it is proven true that these companies participated in fraudulent and corrupt practices, then they should face severe repercussions from the government.

This is not the first time that one of the labs, Quest Diagnostics, has been involved in a kickback controversy. The company agreed to pay $241 million in May of this year to settle a whistle-blower lawsuit that claimed they overcharged the state’s Medicaid program and gave illegal kickbacks of discounted and free testing to doctors, hospitals, and clinics. In August, LabCorp and UnitedHealth Group were charged in another whistle-blower lawsuit that dealt with the same pull-through scheme. Clearly Quest, LabCorp, and UnitedHealth have not learned from their past transgressions if the companies are again embroiled in allegations of kickbacks and fraud.

Looking at this situation, it isn’t surprising that these health insurance companies continually attempt to game the system by looking for kickbacks and taking advantage of the Medicare and Medicaid system. These programs were created with the intention of providing healthcare to ordinary Americans that may not have access to private insurance. Instead of facilitating a public service, many of these insurance companies are aiming to boost only their bottom-line. The labs and the insurance companies in this case have not yet been found to have violated federal law outright, but given their past transgressions, Baucus and Grassley are doing the right thing by investigating their practices. The Senators have said that recent litigation and whistle-blower lawsuits caused them to start the investigation and inquiry into these business practices. This shows the important role that whistleblowers play in holding people accountable for their fraudulent actions. Health care whistleblowers need to be protected and allowed every possible opportunity to help expose corrupt and illegal behavior.

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Young Law Group, P.C., Attorneys-at-Law, are Philadelphia False Claims Act lawyers represents whistleblowers nationwide. For a free confidential consultation, please call Eric L. Young, Esquire at 1-800-590-4116 or email to eyoung@young-lawgroup.com.