Latest FCA Settlement Involving Massachusetts Lab Highlights Federal/State Cooperation

Late last month the U.S. Attorney’s Office for the District of Connecticut issued a press release regarding the latest False Claims Act (FCA) settlement involving the healthcare industry in New England.  According to the Department of Justice (DOJ), Clinical Science Laboratory, Inc. (CSL) and its individual owners agreed to pay over $1.5 million to settle claims that they had violated federal and state FCA laws.  The government stated that Massachusetts-based CSL provided urine drug testing services for substance abuse patients in Connecticut, and that some of the patients were enrolled in the Connecticut Medicaid program, while others submitted to testing through abuse treatment clinics.  According to the government, CSL “regularly accepted payments from Connecticut Medicaid for urine drug screen testing at a rate of $38 per test, while at the same time charging substance abuse treatment clinics approximately $2 per test.”  For its part, CSL stated that it settled the case to avoid costly litigation, and emphasized that it did not admit wrongdoing in the settlement.

In its release, DOJ stated that it was joined in announcing the news by the Connecticut Attorney General, and that the matter was prosecuted jointly by members of the U.S. Attorney’s Office and the Connecticut Attorney General’s Office.  The Attorney General tied the case to the greater opioid epidemic, stating that “Connecticut has been disproportionately devastated…and we must ensure we are getting the absolute most out of every treatment dollar spent.”  The Attorney General thanked the “federal law enforcement partners” for their “joint efforts in this investigation and strong settlement.”  As we have recently written, the government’s focus on the healthcare industry as a target for FCA action is significant and increasing.  The CSL case shows that state government interest in these kinds of cases is also strong, and that companies can expect high-level cooperation between the state and federal governments in FCA matters.

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