The New Jersey Office of the State Comptroller released a report Tuesday finding a lab based in Bensalem regularly overcharged New Jersey’s Medicaid program for urine drug testing services and should repay the state Medicaid program $7.3 million.
Atlantic Diagnostic Laboratories (ADL) regularly overcharged New Jersey’s Medicaid program for urine drug testing services and should repay the state Medicaid program $7.3 million.
OSC’s Medicaid Fraud Division reviewed a sampling of claims from January 2015 through June 2018, finding ADL violated Medicaid protocols when it charged Medicaid as much as $1,035 per drug test while charging other payers as little as $2.38 for the same test.
Medicaid paid ADL between $63.40 and $180.40 for these same services. ADL also improperly billed for tests that the physician or provider had not ordered or for which ADL lacked sufficient documentation, OSC found.
“Laboratories are legally required to charge Medicaid the lowest possible rate and only conduct and bill for medically necessary tests,” said Acting State Comptroller Kevin Walsh. “By violating Medicaid rules and state law, ADL was wasting taxpayer funds and draining resources from people who need them.”
The OSC’s audit found that ADL violated one or more Medicaid regulations in all 261 instances sampled. In 88 of the 261 instances, ADL either billed for tests the healthcare provider had not ordered or lacked required documentation or signatures.
ADL improperly unbundled claims, which is prohibited and typically results in a higher reimbursement rate for a provider, the OSC report say
OSC is seeking to recover $2,943,586 for documentation deficiencies, $1,140,043 for unbundling claims, and $3,269,332 in civil penalties for knowingly submitting claims that violated the Medicaid regulations prohibiting laboratories from charging the state run insurance program more than other payers for the same tests.
During the audit period, ADL was one of the New Jersey Medicaid program’s highest-paid providers of independent clinical laboratory services.
In addition to overcharging Medicaid, ADL improperly sponsored three golf outings for one of its referring providers, OSC said. State law prohibits laboratories from giving “refunds, discounts or kickbacks, whether in the form of money, supplies, equipment, or other things of value,” and it prohibits laboratories from providing “other considerations to a physician or other practitioner, whether or not a rebate is involved,” the report alleges .