Knoxville, Tenn.-based University Health System and Labcorp have paid $388,667 to resolve allegations that they violated the False Claims Act by delaying the submission of physician orders for certain lab tests by Caris Life Sciences to enable improper billings to Medicare.
Five things to know:
1. During the relevant period, CMS's "14-day rule" prohibited labs from billing Medicare for tests performed within 14 days of a patient's hospital discharge. If the test occurred after 14 days, labs could bill Medicare directly; otherwise, they had to bill the hospital.
2. From March 2012 to November 2023, Labcorp and UHS, which operates the University of Tennessee Medical Center, allegedly delayed submitting physician orders for Caris testing. By holding or resubmitting orders until 14 days after discharge, they circumvented CMS's rule to bill Medicare directly.
3. The Justice Department contends this violated the 14-day rule and resulted in false claims for Medicare reimbursement. UHS and LabCorp cooperated with the investigation and resolution, while Caris previously paid $2.8 million to settle related nationwide allegations.
4. This settlement resolves part of a qui tam lawsuit under the False Claims Act, allowing whistleblowers to sue on the government's behalf and share in recoveries. In this case, whistleblower Kim Vo received $73,846 from the settlement proceeds.
5. UHS was not a defendant in the lawsuit but participated in the settlement, which is not an admission of any wrongdoing.