Laboratory testing is a service that every healthcare fraud investigator will come across in the course
of their work. In fact, over a third of all patient encounters involve one or more laboratory tests.
1
While
the average cost per test tends to be quite low, the volume of services billed results in a total cost that
is significant.
In 2015, in one of the largest laboratory services billing fraud cases to date, Millennium Health agreed
to pay $256 million to settle allegations by the U.S. government of improper billing and violations of
the False Claims Act.
2
Millennium Health was alleged to have caused physicians to order excessive
and unnecessary urine drug testing in exchange for illegal kickbacks. Millennium was the largest case
of this type, but many other laboratories have been charged or convicted for similar schemes.
Defining Clinical Laboratory Services
Laboratory testing (also referred to as clinical pathology) is considered a diagnostic service. Medical
practitioners use laboratory tests to diagnose, prevent and monitor diseases. They also use laboratory
testing to detect the presence of substances such as illicit drugs. These tests can be performed
on different kinds of human specimens, including blood, urine, tissues and other fluids. Laboratory
testing involves four main components as shown in Figure 1.
Laboratory Services Fraud
and Abuse
Investigations 101
Figure 1
Order Collection Testing Report
