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Quest & Labcorp Accused of Multi-Billion Dollar Medicare Scam

Quest Diagnostics Incorporated (Quest) and Laboratory Corporation of America (LabCorp), the nation’s two largest laboratories, have been accused of engaging in a multi-billion dollar Medicare scam, according to the February 20 edition of The Dark Report, a medical laboratory industry’s leading trade publication. The trade publication noted that the two labs were accused of billing the federal government $14 billion in questionable Medicare fees over a 10-year period while providing deeply-discounted prices for lab tests to private insurance companies.  

The allegations were made by a whistleblower in a qui tam action. The whistleblwoer was an officer of a company purchased by Quest in 2003.  The whistleblower’s action is against Quest and LabCorp, and alleges violations of the Federal False Claims Act and the Federal Anti-Kickback Statute.  Under U.S. law, whistle-blowers can share in any judgments or settlements that result from such suits.

Whistleblower claims that the two companies offer commercial insurers discounts on lab tests in exchange for the health plans recommending that their network doctors send all of their patients, including those covered by Medicare or Medicaid, to Quest or Lab Corp. The labs then charge higher prices to the government programs, Baker’s suit alleges.

Quest, the biggest U.S. operator of medical labs, declined 1.3 percent to close at $59.17, the biggest single-day drop in about two months. LabCorp fell less than 1 percent to $89.47.

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