ST. LOUIS — A Missouri laboratory agreed this week to a $13.6 million settlement to resolve allegations that it performed expensive and unnecessary urine tests and billed Medicare for them. The company and two of its owners will be barred from federal health care programs for 15 years.
Poplar Bluff-based Gamma Healthcare offered clinical lab testing and digital radiology services in eight states, and a large portion of its business was in providing lab tests for nursing homes. The company was accused of providing more expensive urine tests than doctors ordered.
According to documents filed in the case, when physicians ordered a cheaper form of urinalysis tests, the lab ran the more expensive polymerase chain reaction tests, or PCR tests. Medicare paid $11, on average, for the more basic tests, and an additional $573 for a PCR panel.
The Department of Justice announced the no-fault agreement this week. The case involved a physician whistleblower, who will receive $2.3 million from the settlement.
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An attorney representing Gamma did not immediately respond to requests for comment Thursday.
The feds suspended Gamma’s Medicare payments in September of 2020. In November of 2020, the whistleblower filed a qui tam complaint against Gamma — an action that allows private individuals to sue on behalf of the federal government.
At the time, KCUR reported that 900 long-term care facilities in Missouri used Gamma’s services, and that the sudden federal suspension sent nursing homes and assisted living facilities scrambling to line up other options.
The company shut down that month.
Gamma and its owners had reached a previous settlement, in 2018, when the lab agreed to pay $525,000 to resolve allegations that it overbilled Medicare for mileage fees for picking up specimens, according to previous Post-Dispatch reporting.