KNOXVILLE, TENN. — LabCorp and University Health System, Inc. (UHS) have agreed to pay $388,667.17 to settle allegations of violating the False Claims Act, according to an announcement by the U.S. Attorney’s Office for the Eastern District of Tennessee.
The settlement addresses claims that LabCorp, including its affiliated entities, and UHS delayed submitting physician orders for certain laboratory tests conducted by Caris Life Sciences, Inc. (Caris). This delay allowed for improper Medicare billings for those tests.
The issue stemmed from the Medicare 14-Day Rule, which prohibits labs from billing Medicare for tests ordered within 14 days of a patient’s discharge from a hospital. In such cases, the hospital must bill the tests, not Medicare. However, between March 2012 and November 2023, UHS and LabCorp Tennessee (LCTN), which provides lab services at the University of Tennessee Medical Center (UTMC), delayed or resubmitted orders for Caris’s tests in a manner that circumvented the rule, enabling them to bill Medicare directly.
This settlement partially resolves a qui tam lawsuit filed under the False Claims Act, which allows private parties to file on behalf of the government and share in any recovery. The whistleblower, Kim Vo, was awarded $73,846.76 as part of the settlement.
Caris Life Sciences had previously settled similar allegations, paying $2.8 million for nationwide violations.
The case highlights ongoing efforts to enforce Medicare billing regulations and the role of whistleblowers in identifying fraudulent activities.
