Corruption "Rampant" in Drug Testing Industry

Corruption "Rampant" in Drug Testing Industry

By May Wilkerson 04/09/12

As another multi-million dollar claim is settled, drug testing companies allegedly use many underhand tactics to chase profits.

Image: 
Calloway Labs bribed Sober facilities to give
excessive drug tests.
Photo via

America's burgeoning billion-dollar drug testing industry is allegedly rife with corruption. In the latest case, Calloway Laboratories, a Massachusetts drug testing lab, is to pay $20 million to settle allegations of an elaborate kickback scheme including fake drug tests, phony companies and forged signatures. Calloway Labs were indicted in 2010 for bribing sober living houses to administer unnecessary urine tests to their residents. The testing was funded by Medicaid, and ultimately cost the Massachusetts Medicaid program (MassHealth) millions of dollars in what Attorney General Martha Coakley has called "one of the most egregious abuses of the Medicaid program our office has handled." The Calloway settlement is the seventh to result so far from Massachusetts' investigation into corruption in the drug testing industry. Howard Appel, president of Millennium Laboratories, another drug testing company, claims fraudulent schemes and bribery are rampant in the industry, and that many companies use "smoke and mirrors" tactics to beat competition. "What you see is a proliferation of labs opening up that in trying to get a foothold in the business will offer anything, say anything and do anything to try to induce physicians to getting their business," Appel told American News Report. Ironically, Millennium was accused by Calloway of using fraudulent billing codes; the lawsuit was dismissed in February.