Quest Diagnostics Accused of Overbilling Medicare, Medicaid by at Least $1B

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Former medical laboratory executives have filed a lawsuit against Quest Diagnostics, accusing the Madison, N.J.-based company of overcharging the federal government by more than $1 billion, according to a news release from Fair Laboratory Practices Associates.

FLPA filed the suit in 2005 and the federal court recently unsealed an amended complaint charging Quest with violations of the False Claims Act and Federal Anti-Kickback Statute. The suit claims that billions of dollars in lab fees were siphoned into illegal kickbacks to private insurers that are Quest's largest contract providers, such as Aetna and Cigna. The suit alleges that Quest pressured private insurers to pressure physicians to send lab work to Quest for Medicare and Medicaid patients.

The federal government has declined to participate in the lawsuit, as announced July 5. Quest has vehemently denied the allegations, stating the company did not, and does not, provide kickbacks to physicians, insurers or anyone else to induce referrals of testing.

In May, Quest paid $241 million to settle a similar lawsuit filed by the state of California. The suit claimed Quest overcharged the state by as much as 400 percent for blood, urine and other tests conducted on Medicaid patients. The suit was dismissed based on ethic violations committed by a lawyer participant in the plaintiff group.

Read the release on the lawsuit against Quest Diagnostics.

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