District Court Dismisses Whistleblower’s Medicaid Fraud Allegations Against Quest and LabCorp


The U.S. District Court for the Eastern District of Virginia granted Quest Diagnostics Inc.’s (Quest’s) Motion to Dismiss a whistleblower lawsuit under the Virginia Fraud Against Taxpayers Act and the federal False Claims Act that alleged Quest and its co-defendant, Laboratory Corporation of America (LabCorp), committed fraud against the Virginia Medicaid program by charging it higher rates than they charged to the public. A more detailed discussion of the complaint is available here. The district court stated that applicable law does not require laboratories to charge Medicaid their lowest rates and found that the whistleblower failed to identify a specific false claim that the defendants submitted to Medicaid or to show how the defendants’ claims for reimbursement violated Virginia or federal law. The district court seemingly accepted Quest’s argument in its motion to dismiss that the relator’s allegations were based on regulations that governed the payments from Virginia’s Medicaid program, and not the charges that providers bill to Medicaid. The district court dismissed the complaint without prejudice and gave the relator 14 days to amend the complaint. The case is Hunter Labs. LLC v. Quest Diagnostics Inc., Case No. 1:13-cv-01129 (E.D. Va).

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