In October 2022, Sutter Health reached a $13 million settlement to resolve allegations that it violated the False Claims Act by billing for toxicology screening tests performed by outside labs.
The United States alleged that Alta Bates Summit Medical Center, a Sutter Health hospital, entered into a Laboratory Services Agreement with Navigant Network Alliance, LLC, by which Navigant would refer urine toxicology specimens obtained from physicians and laboratories throughout the United States to Sutter. Sutter then submitted bills – or caused bills to be submitted – for the reimbursement of the qualitative and quantitative testing it supposedly performed on those specimens.
However, the United States alleges that Sutter did not perform the quantitative testing on thousands of the specimens, and instead the quantitative tests were performed by third party labs. Even still, Sutter sought reimbursement for the tests.
The United States alleges that this behavior took place between August 1, 2016, and June 30, 2017. During that period, Medicare, Medicaid, Tricare, and the Federal Employees Health Benefits Program all made payments urine toxicology testing that Sutter did not perform.
To resolve the allegations, Sutter agreed to pay $13,091,452. Of that amount, Sutter has already paid over $6.5 million, and the balance (or approximately $6.5 million) was set to be paid by mid-November. As we often see, this settlement is not an admission of liability by Sutter Health.
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