Carolinas Healthcare System (CHS) has agreed to pay the federal government $6.5 million to resolve allegations that the company violated the False Claims Act by up-coding claims for urine drug tests to receive higher payment than allowed for the tests.
According to court documents, from 2011 to 2015, CHS conducted “moderate complexity” tests, but submitted claims that indicated the company had conducted “high complexity” tests.
The government alleged that CHS engaged in up-coding by submitting claims using code G0431, which should be used only for tests classified as “high complexity” by the FDA, instead of using code G0434, which is the code for moderate complexity tests, which triggers a payment of approximately $20. Thus, the government alleges that federal healthcare programs paid CHS, and certain facilities under contract with CHS, approximately $80 more per test for the claims submitted with the higher-paying code.
The allegations arose from a lawsuit filed by a whistleblower who was a former laboratory director for CHS, under the qui tam provisions of the False Claims Act. He will receive $1.3 million from the settlement.