Laboratory Corporation of America (Labcorp) agreed to pay $2.1 million to settle allegations the company overbilled the Department of Defense (DoD) for genetic tests performed by a third party.

The Department of Justice (DOJ) announced the settlement Monday for violations of the False Claims Act (FCA). The complaint against Labcorp was originally filed by a former employee, Donna Hecker-Gross, under the qui tam provisions of the FCA. Hecker-Gross will receive $357,000 from the settlement amount.

The details: Labcorp entered into a contract with the DoD in 2012 to provide testing services for U.S. military worldwide. The company then subcontracted with GeneDx to conduct specialty genetic tests. GeneDx billed LabCorp for the tests, and Labcorp would then bill the DoD.

From December 2013 through June 2021, Labcorp double or triple billed the DoD for tests conducted by GeneDx, overcharged the DoD for GeneDx tests, and billed the DoD for tests for which there was no evidence of results, the DOJ alleged.

“Federal contractors are required to bill for costs actually incurred. The U.S. Attorney’s Office and our partners are committed to protecting taxpayer dollars and ensuring integrity and compliance with government contracts,” said U.S. Attorney Erek Barron in the District of Maryland’s press release.

Company response: “It is important to note that this settlement is not an admission of wrongdoing, and Labcorp vigorously disputed the allegations in this case,” a company spokesperson said in an emailed statement. “Labcorp entered into the settlement to avoid the costs and burdens of litigation.”

Labcorp agreed to pay $19 million in February to resolve DOJ allegations it engaged in a kickback scheme with Health Diagnostic Laboratory and Singulex to pay referral fees to doctors, resulting in the filing of false claims to Medicare.

Adrianne Appel writes regulatory news, policy, and trends for Compliance Week. She previously reported about policy developments for Bloomberg Law and Bloomberg Government.

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