Maryland laboratory company pays over $300,000 to settle claims about unnecessary tests

by Ben Vernia | June 17th, 2023

On June 16, the Department of Justice announced that Maryland-based VitalAxis, Inc., had agreed to pay over $300,000 to resolve civil charges that the company ran (and billed the government for) unnecessary respiratory analyses along with COVID-19 tests. According to DOJ’s press release:

VitalAxis Inc., a Maryland-based billing company for diagnostic laboratories, has agreed to pay $300,479.58 to resolve False Claims Act allegations that it caused the submission of false claims to Medicare for medically unnecessary respiratory pathogen panels run on seniors who received COVID-19 tests.

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Throughout 2020, VitalAxis performed billing services for a diagnostic laboratory in Atlanta, Georgia that provided COVID-19 testing to residents of senior living communities. For one chain of communities, the laboratory directed VitalAxis to bill Medicare for respiratory pathogen panels purportedly ordered by a physician who had not actually ordered the tests and who was ineligible to treat Medicare beneficiaries. VitalAxis found the credentials of a different physician and, without authorization, billed Medicare using that physician’s name. Medicare subsequently paid the laboratory for these medically unnecessary tests.

VitalAxis received a credit in connection with the settlement announced today in recognition of their cooperation, including by performing and disclosing the results of an internal investigation, disclosing relevant facts and material not known to the government but relevant to its investigation, providing information relevant to potential misconduct by other individuals and entities, and admitting liability.

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The case was apparently initiated by the government, and not by a whistleblower.

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