Millennium Health to Pay $256 Million to Resolve False Claims Act Case

Millennium Health (formerly Millennium Laboratories) today reached a $256 million settlement with the Justice Department to resolve allegations that it billed for Medicare, Medicaid, and other federal health care programs for medically unnecessary urine drug and genetic testing and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium.

As part of the settlements, Millennium has agreed to pay $227 million to resolve allegations that it violated the False Claims Act (FCA) by systematically billing federal health care programs for excessive and unnecessary urine drug testing from Jan. 1, 2008, through May 20, 2015. 

The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs.  This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. 

The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing—violated the Stark Law and the Anti-Kickback Statute. The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.

Millennium also has agreed to pay $10 million to resolve FCA allegations that it submitted false claims to federal health care programs from Jan. 1, 2012, through May 20, 2015, for genetic testing that was performed routinely and without an individualized assessment of need. 

Corporate Integrity Agreement

In connection with the FCA settlements, Millennium has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG).  In addition, Millennium will pay $19.2 million to the Centers for Medicare and Medicaid Services to resolve certain administrative actions related to Millennium’s urine drug test billing practices.

“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel Levinson of HHS-OIG.  “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”

The allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the FCA, which allow private parties to bring suit on behalf of the government and to share in any recovery.  Under the Act, the United States can elect to intervene in an action filed by a whistleblower, as it did, in part, with respect to several of the qui tam actions regarding urine drug testing allegations.  The whistleblowers will receive $30.35 million from the FCA recovery for the urine drug testing claims and $1.48 million from the FCA recovery for the genetic testing claims.