Millennium Health, one of the nation’s largest urine drug testing laboratories, has agreed to pay the government $256 million to resolve claims that it violated the Federal False Claims Act (“FCA”).

The Settlement concludes eight underlying qui tam actions brought in the District of Massachusetts by various whistleblowers, including health care companies, insurers, and individuals.

The Government’s Complaint-in-Intervention detailed a referral scheme designed to defraud federally funded health care programs of millions of dollars. In summary, Millennium was accused of the following:

• Billing Medicare, Medicaid and other federal health care programs for medically unnecessary urine drug and genetic testing;
• Causing physicians to order excessive numbers of urine drug tests through the promotion of “custom profiles,” which, in essence, were standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs; and
• Violating the Stark Law and the Anti-Kickback Statute by providing physicians with free urine drug test cups in exchange for the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing.

Pursuant to the qui tam pro visions of the FCA, the whistleblowers will receive $30.35 million from the FCA recovery for the urine drug testing claims and $1.48 million for the genetic testing claims.

In addition to the lofty settlement payments, Millennium has also entered into a corporate integrity agreement (“CIA”) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). It will also pay $19.2 million to CMS to resolve certain administrative actions related its urine drug test billing practices.

The cases resolved by the settlement are United States ex rel. McGuire v. Millennium Laboratories, Inc., No. 12-cv-10132, United States ex rel. Uehling v. Millennium Laboratories, Inc. et al., No. 12-cv-10631, United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 13-cv-10825, United States, et al., ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California, Inc., No. 09-cv-12209; United States, et al., ex rel. Wendy Johnson v. Millennium Laboratories, Inc., No. 12-cv-12387, United States ex rel. Allstate Insurance Co. and Lawrence K. Spitz, M.D. v. Millennium Laboratories, Inc., No. 14-cv-14276, United States ex rel. Amadeo Pesce, Ph.D. v. Millennium Health, No. 15-cv-10821, and United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 14-cv-13052, all in the U.S. District Court for the District of Massachusetts.

The Complaint-in-Intervention is attached here.