Sutter Health agreed to pay more than $13 million for violating the False Claims Act by billing the United States for toxicology tests it did not conduct but outsourced to other labs, the Department of Justice (DOJ) announced.

From August 2016 through June 2017, Sutter engaged in a laboratory services agreement with Navigant Network Alliance, in which Navigant sent urine specimens from physician offices and other laboratories nationwide to Sutter for testing. The DOJ alleged in its settlement agreement Sutter outsourced thousands of tests to third-party laboratories and still billed government health programs as if it had performed the tests at its own labs, a violation of the False Claims Act.

The DOJ alleged Sutter knowingly billed and was paid by the government programs for the tests it did not perform.

“When medical providers charge federal healthcare programs for services that other providers actually performed, the integrity of these programs is undermined,” said Steven Ryan, special agent in charge at the Office of Inspector General at the Department of Health and Human Services, in a press release Monday.

Sutter did not admit liability in signing the settlement agreement, the DOJ noted. The healthcare services provider declined to comment for this story.

In August 2021, Sutter and its affiliates agreed to pay $90 million to the DOJ to settle allegations of violating the False Claims Act by knowingly submitting diagnosis codes to Medicare to make it appear patients being treated were sicker and therefore more expensive to treat.

Also in August 2021, Sutter paid $575 million to the state of California to settle allegations it engaged in anti-competitive practices that led patients to pay more for healthcare.