Attorney General Tong announces $4.8 million settlement with Redwood toxicology lab
(Hartford, CT) – Attorney General William Tong, U.S. Attorney Leonard C. Boyle and Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of Inspector General, announced today that Redwood Toxicology Laboratory, Inc. has entered into a civil settlement agreement with federal and state governments in which it will pay nearly $4.8 million to resolve allegations that it overcharged the Connecticut Medicaid program for certain services of laboratory.
Redwood Toxicology Laboratory (“RTL”), headquartered in Santa Rosa, California, provides laboratory testing services, in particular urine drug testing services, for substance abuse patients enrolled in the Connecticut Program Medicaid. The government alleges that RTL violated Connecticut’s so-called “most favored nation” regulations (Conn. Agencies Regs. § 17b-262-649), which provide, in essence, that clinical laboratories must not request payment to Medicaid of Connecticut for services at a higher price than the lowest price charged by the company for the same or similar services from other third parties. Specifically, the government alleges that RTL regularly accepted payments from Connecticut Medicaid for certain urine drug tests at the rate of $38 per test, while charging other third parties from $2 to $10.50. for the same or substantially similar urine drug tests.
To resolve the governments’ allegations, RTL agreed to pay $4,797,578, which covers claims submitted to the Connecticut Medicaid program from January 1, 2015 through February 24, 2018 inclusive.
“Most-Favoured-Nation State regulations exist to ensure fair pricing for our taxpayer-funded Medicaid program. In coordination with our federal and state partners, we will act aggressively to ensure that public funds are protected. and well spent, said Attorney General Tong.
“This company’s overbilling of Medicaid resulted in a large settlement of nearly $4.8 million, thanks to vigilant anti-fraud action at the state and federal levels,” said Department of Social Services Commissioner Deidre S. Gifford, whose agency administers Medicaid in Connecticut. “I join Attorney General Tong in congratulating our program integrity staff and law enforcement partners for this successful outcome on behalf of taxpayers.”
Anyone with knowledge of suspected fraud or abuse in the public healthcare system is urged to contact the Attorney General’s Antitrust and Government Program Department at 860-808-5040 or by email at [email protected] .gov; the Medicaid Fraud Control Unit at 860-258-5986 or by email at [email protected]; the Department of Social Services Fraud Reporting Hotline at 1-800-842-2155, online at www.ct.gov/dss/reportingfraud, or by email at [email protected], or by calling 1-800-HHS-ADVICE.
Assistant Attorney General Gregory O’Connell, Forensic Fraud Examiner Lisa Bailey and Jeremy Pearlman, Head of the Department of Antitrust and Government Fraud Program assisted the Attorney General in the case.
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