Whistleblower Suit Settles Against Quest Diagnostics


Quest Diagnostics has paid the federal government $1.79 million to settle whistleblower allegations that it submitted false claims to the Medicare program, U.S. Attorney Benjamin Wagner announced Tuesday.


Based in Madison, N.J., Quest Diagnostics has 10 clinical laboratory draw and testing stations in the Sacramento area. The company bought more than 50 testing centers in California and Nevada from Dignity Health in 2013.


The settlement resolves allegations that labs now owned by Quest submitted duplicate claims for certain venipuncture services — vein puncture to draw blood, do intravenous feeing or administer medicine — as well as some panel tests and components of those panels.   The alleged duplicate billing occurred from 2004 through 2014.


The allegations involve billing for services provided for the same patient on the same day when two or more providers ordered the same test.   This is the second settlement for Quest in recent years. In 2011 California reached a $241 million settlement with the company to recover overcharges.


The settlement resolves a whistleblower lawsuit filed under the federal False Claims Act. The law allows private citizens to bring civil actions on behalf of the federal government and share any recovery.   The whistleblower is Elisa Martinez, a phlebotomist who used to work at a Quest testing center in Red Bluff. She will receive $358,000.   Quest Diagnostics spokesman Dennis Moynihan said in a statement the company is pleased to have reached agreement with the government to settle the case.


“In certain extremely rare instances, information technology issues affected Medicare’s reimbursement for certain test codes that resulted in duplicate payments at Quest,” Moynihan said.   Noting that the amount at issue represents less than one-hundredth of 1 percent of the amount Quest receives from Medicare each year, he also said the company has taken steps to correct the problem.


“We are in the process of updating these billing systems to prevent this from happening in the future.”   The case was investigated by the U.S. Attorney’s Office for the Eastern District of California.


Assistant U.S. Attorney Catherine Swann handled the matter.


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