Healthcare fraud is a significant issue that costs taxpayers billions of dollars every year. A recent case involving a clinical testing laboratory in Fenton, Missouri, sheds light on the severity of this problem and underscores the importance of regulatory compliance in the healthcare sector.

The owners of Thyroid Specialty Laboratory Inc., doing business as TEN Healthcare (TEN), their management company, 3890 Management LLC, and TEN Marketing have consented to pay $1.9 million and relinquish nearly $7 million held in escrow to settle civil claims. The accusations brought forward allege that they submitted claims for laboratory tests that were not medically necessary, thus violating the regulations governing Medicare and Medicaid.

According to the U.S. Attorney’s Office, Eastern District of Missouri, the settlement will address claims that the company falsified billing for tests that lacked medical necessity. The government asserts that from June 12, 2018, to July 3, 2023, TEN misrepresented to medical providers that their Upper Respiratory Infection (URI) and Urinary Tract Infection (UTI) Polymerase Chain Reaction (PCR) testing panels were essential and medically reasonable. However, the panel included over thirty pathogens that didn’t share common symptomology, rendering the extensive testing unnecessary.

In addition, it is alleged that even after a change of requisition form on February 10, 2021, that was intended to let providers make independent medical decisions, TEN continued to communicate to providers and the public that the entire URI and UTI PCR panels were reasonable and superior to other forms of testing. This misrepresentation had financial implications as TEN billed Medicare, Medicaid, TRICARE, and the Railroad Retirement Board for tests that were not medically required or reasonable.

The allegations extend further, suggesting TEN switched billing codes to avoid Medicare’s rejections rather than addressing the validity of their tests. This unethical practice was supposedly carried out from January 1, 2016, to March 1, 2021, during which TEN also submitted false claims for therapeutic drug assays and specimen validity testing.

These allegations were serious enough to prompt the Centers for Medicare & Medicaid Services to suspend Medicare payments to TEN, which now total more than $6.9 million.

While the settlement agreement is neither an admission of guilt nor a concession by the United States, the implications are clear. Laboratories, like any other healthcare providers, have a profound responsibility to ensure that they submit legitimate and medically necessary claims to Medicare.

The Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Curt L. Muller, has echoed this sentiment, stating that providers have a fundamental obligation to provide legitimate services and HHS-OIG is committed to investigate any entity that attempts to defraud federal healthcare programs.

This case serves as a reminder for healthcare providers and attorneys alike about the importance of adherence to regulations and medical ethics. It’s crucial that all services provided are indeed medically necessary and that all claims submitted for reimbursement are accurate and justified. Regulatory compliance is not just a legal requirement but also an ethical obligation to patients and to the larger society that funds these essential healthcare programs.