Treatment Center and Lab to Pay for Fraudulent Drug Testing

Treatment Center and Lab to Pay for Fraudulent Drug Testing

By Paul Gaita 02/12/14

Two Kentucky-based companies will pay the U.S. $15.75 Million after getting caught fraudulently billing for unnecessary urine tests.

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The former owners of a chain of opiate addiction recovery centers have agreed to pay the U.S. government $15.75 million in order to resolve allegations that they violated the False Claims Act by fraudulently billing federal health care programs for unnecessary urine tests.

According to a press release from the Office of the U.S. Attorney of the Eastern District of Kentucky, the drug screening tests in question were conducted in 2010 as a mandatory part of treatment for patients at SelfRefind, a chain of 12 addiction recovery clinics located throughout Kentucky and Ohio. The chain’s one-time owners, Dr. Bryan Wood and Dr. Robin Peavler, then automatically referred the results to PremierTox, a laboratory also owned by Wood and Peavler. According to the government’s allegations, PremierTox did not have the capacity to handle the large volume of drug screens sent to it by SelfRefind and froze the samples in a storage unit for many months before performing the additional tests.

By that point, the results yielded by PremierTox were no longer needed for the patients who had submitted the samples. Not only did the laboratory conduct the unnecessary tests, they also submitted false claims that misidentified the class of drugs sought in the screens in order to receive a higher reimbursement from Medicare and Medicaid.

Approximately $2.74 million of the reimbursement will be paid to the Commonwealth of Kentucky, which will allow the state to recover its share of the Medicaid funds. In addition to its financial requirements, PremierTox has agreed to undertake substantial internal compliance reforms and commit to a third-party review of its claims to federal health care programs for the next five years.

A spokesperson for SelfRefind issued a statement which noted that Wood and Peavler no longer own the chain, and that the current problem will not cause any delay in their services, which have been conducted at a new facility since November 2012.