The investigation was sparked by a whistleblower complaint from the Baltimore area, leading to a comprehensive state and federal inquiry into a scheme that has thrived amidst the ongoing opioid crisis.
Attorney General Anthony G. Brown announced today that Precision Toxicology has agreed to a $27 million settlement to resolve serious allegations regarding its billing practices. The company, one of the largest urine drug testing laboratories in the U.S., is accused of improperly billing government health programs for unnecessary urine drug tests and providing kickbacks to physicians for lab referrals.
The investigation was sparked by a whistleblower complaint from the Baltimore area, leading to a comprehensive state and federal inquiry into a scheme that has thrived amidst the ongoing opioid crisis.
“Our office will not allow companies to fraudulently obtain taxpayer money by funneling Marylanders into medically unnecessary drug tests,” said Attorney General Brown. “The opioid epidemic is a national scourge. Companies’ attempts to take advantage of that public health crisis will not be tolerated.”
From January 1, 2013, to December 31, 2022, it is alleged that Precision engaged in excessive and unnecessary urine drug testing. Physicians were reportedly encouraged to order an abundance of tests without adequately assessing each patient’s individual needs, violating federal and state laws that mandate payment only for medically necessary services.
Additionally, the company allegedly provided free urine drug test kits to physicians on the condition that they send the specimens back to Precision for further testing, which is considered a breach of anti-kickback laws that prohibit such arrangements.
As part of the settlement, Precision will also enter into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General, allowing for ongoing federal oversight and necessary reforms.
Of the total settlement, $18.2 million will go to the federal government, while Maryland will receive $5.7 million. Other states impacted by the scheme, including Illinois, Minnesota, Virginia, Georgia, and Colorado, will also share in the recovery. Notably, whistleblower Bryce Hudak, who brought the case to light while working at a Baltimore treatment center, will receive $2.7 million from the settlement.
This case emerged from three lawsuits filed under the federal and state False Claims Act, enabling private individuals to sue on behalf of the government. The efforts to resolve the case were a collaborative endeavor involving multiple federal and state agencies.
In expressing gratitude for the successful resolution, Attorney General Brown acknowledged Assistant Attorney General Raja Mishra's contributions to the case.
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