Medical testing provider Laboratory Corp. of America will pay $49.5 million to the state of California to settle a lawsuit alleging illegal overcharges to the state’s medical program for the poor, according to a news release from Attorney General Kamala D. Harris.
The settlement is the result of a whistleblower suit filed in 2005. It claimed Lab Corp. and other medical laboratories systematically overcharged the Medi-Cal program for more than 15 years and gave illegal kickbacks to physicians, hospitals and clinics that referred Medi-Cal patients to the labs. These alleged kickbacks came in the form of discounted or free testing.
The suit claims Lab Corp. charged Medi-Cal more than five times as much as it charged other customers for certain tests. For example, it was accused of charging Medi-Cal $35.04 to test for total testosterone, while it allegedly charged another customer $7.36 for the same test.
After payment of the whistleblower share, the government will receive $35.15 million as a result of this settlement.
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