Laboratory company pays $41 million to settle whistleblowers’ claims of unnecessary testing

by Ben Vernia | April 16th, 2020

On April 15, the Department of Justice announced that Tampa, Florida-based Logan Laboratories, Inc., has agreed to settle whistleblowers’ allegations that the company submitted claims for unnecessary urinalysis testing. According to DOJ’s press release:

Logan Laboratories Inc. (Logan Labs), a reference laboratory in Tampa, Florida; Tampa Pain Relief Centers Inc. (Tampa Pain), a pain clinic also based in Tampa Florida, and; two of their former executives, Michael T. Doyle and Christopher Utz Toepke (collectively, Defendants) have agreed to pay a total of $41 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid, TRICARE, and other federal health care programs for medically unnecessary Urine Drug Testing (UDT), the Department of Justice announced today.  Both Logan Labs and Tampa Pain are subsidiaries of Surgery Partners Inc.  Doyle is the former CEO of Surgery Partners and Logan Labs.  Toepke is the former Group President for Ancillary Services at Surgery Partners, with oversight of Logan Labs, and a former Vice President at Tampa Pain.

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The government alleged that Defendants knowingly submitted or caused the submission of false claims to federal health care programs for presumptive and definitive UDT, in circumstances where such testing was not medically reasonable or necessary.  Presumptive UDT are tests that screen for the presence of drugs, and definitive UDT are tests that identify the amounts of those drugs in a patient’s system.  The government alleged that Defendants developed and implemented a policy and practice of automatically ordering both presumptive and definitive UDT for all patients at every visit, without any physician making an individualized determination that either test was medically necessary for the particular patients for whom the tests were ordered.  According to the government’s allegations, the medically unreasonable and unnecessary definitive UDT was performed at Logan Labs, the medically unreasonable and unnecessary presumptive UDT was performed at Tampa Pain, and the respective resulting false claims were submitted by both Tampa Pain and Logan Labs to federal health care programs, from Jan. 1, 2010 through Dec. 31, 2017.   

Contemporaneous with the False Claims Act settlement, Logan Labs entered into an “Integrity Agreement” and Tampa Pain entered into a “Corporate Integrity Agreement” with the Department of Health and Human Services, Office of Inspector General.

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The Government announced that the two whistleblowers, who filed separate qui tam complaints, will receive approximately $7.79 million of the settlement (a 19% relators’ share).

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