Attorney General William Tong announced a $1,729,977 settlement with Enzo Biochem, Inc. and its subsidiary Enzo Clinical Labs, Inc., resolving allegations that the lab overbilled the Connecticut Medicaid program for testing services in violation of the state False Claims Act.
Until its sale in 2023, Enzo operated a clinical lab testing facility in Farmingdale, New York, serving patients and healthcare practitioners in New York, New Jersey, and Connecticut. As an enrolled Connecticut Medicaid provider, Enzo was required to comply with state regulations prohibiting labs from billing Medicaid at higher rates than those billed to or accepted from other payers.
A Department of Social Services audit found that between October 2019 and September 2021, Enzo billed the Connecticut Medicaid program full prices for testing services provided at discounted rates for non-Medicaid patients. Enzo was ordered to gradually repay $981,951 to the state Medicaid program through withheld reimbursements. Starting in 2022, triggered by a whistleblower complaint, an investigation conducted by the Office of the Attorney General found that Enzo had continued to overbill the state for testing services.
Today’s settlement addresses both the outstanding audit repayment as well as new claims arising from the whistleblower investigation. The civil settlement includes the resolution of Connecticut’s claims brought under the qui tam or whistleblower provisions of the Connecticut False Claims Act. Under those provisions, a private party can file an action on behalf of Connecticut and receive a portion of any recovery. The relator’s share from the proceeds of the settlement will be $238,369. The action is captioned United States of America, State of New York, and State of Connecticut ex rel. Fraud Buster LLC v. Enzo Biochem, Inc. et al., No. 22-cv-07613 filed in the Southern District of New York.
“As a Medicaid provider, Enzo was responsible for knowing and following the law including the requirement to bill Medicaid at the lowest price charged or accepted from other payers,” said Attorney General Tong. “Enzo overcharged the state, was flagged in an audit, was forced to repay hundreds of thousands of dollars and then continued to overcharge the state. We are grateful to the Department of Social Services and U.S. Attorney’s Office for their collaboration in this case as well as to whistleblowers for their assistance and information.”
“The Office of Quality Assurance division within Department of Social Services is committed to ensuring Connecticut’s Medicaid program is never overcharged for services,” DSS Commissioner Andrea Barton Reeves said. “The Department is dedicated to ensuring payments and billings are appropriate within CMAP program and will continue vigilant oversight moving forward.”
Anyone with knowledge of suspected fraud or abuse in public healthcare system is asked to contact Attorney General’s Government Program Fraud Section at 860-808-5040 or by email at ag.fraud@ct.gov; Medicaid Fraud Control Unit at Connecticut Chief State’s Attorney’s Office at 860-258-5986 or by email at conndcj@ct.gov; or Department of Social Services fraud reporting hotline at 1-800-842-2155 online at www.ct.gov/dss/reportingfraud or by email providerfraud.dss@ct.gov.
Assistant Attorney General Eric Babbs; Forensic Fraud Examiner Lisa Bailey; Paralegal Orlean Woodham; Deputy Associate Attorney General Gregory O’Connell assisted Attorney General Tong in this matter.