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Coakley settles Medicaid fraud allegations

By Bryan Cohen | Aug 22, 2011


BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $153,000 settlement on Friday with a Bedford, Mass., clinical laboratory to resolve allegations it overcharged Medicaid.

Diagnostic Laboratory Medicine Inc. allegedly overcharged Medicaid for urine drug tests that were not properly ordered by a doctor or other authorized prescriber for a medically necessary purpose between 2005 and 2011.

Coakley alleges that DLM overcharged the state Medicaid program for the urine tests by failing to give the Medicaid program its "best price" and failing to comply with record keeping and documentation requirements. These alleged violations of state law and Medicaid regulations and rules resulted in significant Medicaid overpayments to DLM.

"Overbilling and failure to comply with Medicaid regulations takes away valuable health care resources from those that need it most," Coakley said. "Our office will continue to pursue individuals that abuse the system and return the funds to the state."

DLM agreed to reimburse state taxpayers in the amount of $153,780.87 plus interest and to comply with all state laws and Medicaid regulations in the future.

The agreement with DLM is the sixth settlement Coakley's Medicaid Fraud Division has made connected with urine drug tests billed by independent clinical laboratories to the state Medicaid program. The cases have returned approximately $10 million to the state Medicaid program and have resulted in 42 clinical indictments.

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