LEXINGTON, Ky. — Two Kentucky-based businesses involved in performing urine drug tests for the family court system have agreed to collectively pay $1,740,620 to resolve civil allegations that they improperly billed those tests to Medicare and Kentucky Medicaid.
Blue Waters Assessment and Testing Services, LLC (“BATS”) is a Lexington-based business that provides services relating to urine drug testing, including the collection of specimens from individuals who were ordered by the Fayette County family courts to receive such testing as part of their court cases. BATS sent the specimens to VerraLab JA, LLC, a clinical laboratory based in Louisville that does business under the name BioTap Medical (“BioTap”). BioTap performed the urine drug tests and billed them to Kentucky Medicaid and Medicare.
Billing these tests to Kentucky Medicaid and Medicare violated the False Claims Act, a federal law that prohibits the submission of false or fraudulent claims for payment to the federal government, because Medicaid and Medicare only pay for laboratory tests used for purposes of medical diagnosis or treatment. Medicare and Medicaid – as federally-funded health insurance programs – do not pay for tests performed for non-medical reasons, such as those that are performed only to satisfy a court order. In fact, Medicaid’s regulations explicitly prohibit reimbursement for laboratory tests, such as urine drug tests, that were ordered by a court.
The Government alleged that BioTap knew that...
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