West Virginia Breaks Records for Fraud Settlement

According to a press release from the U.S. Attorney’s Office Southern District of West Virginia on May 21, West Virginia broke a state record with a $4.675 million recovery settlement with Massachusetts-based Calloway Laboratories, Inc. (Calloway Labs) for submitting false claims. Calloway Labs settled after allegations of routinely billing, from March 2009 to April 2013, Medicare and West Virginia Medicaid using a code designated for pathology services in addition to the code for urine drug testing.

West Virginia Medicaid Fraud Control Unit and the U.S. Department of Health & Human Services (HHS), Office of the Inspector General (OIG) investigation revealed Calloway Labs performed medical review with every urine drug screen, which is not covered by the Centers for Medicare & Medicaid Services (CMS). Healthcare providers said the pathology services were unnecessary and they did not knowingly order such services. Because Calloway Labs claimed the medical review under the code for covered pathology services, Medicare and West Virginia Medicaid paid the claims.

According to the press release, Gloria Jarmon, Deputy Inspector General for Audit Services said, “HHS-OIG uses a multidisciplinary approach, including data-mining, audits, and, as appropriate, enforcement actions, to protect the integrity of HHS programs and recover taxpayer dollars.”

U.S. Attorney Booth Goodwin remarked after the settlement, “We have recovered the losses to the affected federal health care programs, covered the expense of investigation and the cost of future program compliance monitoring, and prompted the elimination of systematic problems leading to the depletion of federal health care dollars. I couldn’t be more pleased with the outcome, and I applaud the joint efforts of the agencies that brought us to this resolution.”

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Michelle Dick

Executive Editor at AAPC

Michelle A. Dick has been executive editor for AAPC for over 10 years. Prior to her work at AAPC, she was editor-in-chief at Eli Research and Element K Journals, and disk ad coordinator, web designer/developer, and graphic artist at White Directory Publishers, Inc. She has a Bachelor of Science in Graphic Design from the State University of New York - Buffalo State and is a member of the Flower City Professional Coders in Rochester, N.Y.

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