Precision, a national toxicology laboratory, has agreed to pay $27 million to settle allegations of submitting false claims and engaging in illegal kickbacks related to urine drug testing (UDT). The allegations covered the period from January 1, 2013, through December 31, 2022. It was claimed that Precision conducted UDTs that were not medically necessary for diagnosing or treating illnesses or injuries.
The settlement addresses accusations that Precision used non-allowable blanket orders for UDT without individualized physician assessments. Additionally, from January 1, 2013, to June 30, 2014, Precision allegedly provided free point-of-care UDT cups to physicians in exchange for referrals, violating the Anti-Kickback Statute.
The investigation into these practices was carried out by a team from the National Association of Medicaid Fraud Control Units (NAMFCU), along with the Department of Justice and United States Attorney’s Offices in Colorado, Connecticut, and Maryland. The NAMFCU team included representatives from several state Attorneys General offices.
Landon M.M. Murata of Hawaiʻi's Medicaid Fraud Control Unit and Judy Mohr Peterson from the Med-QUEST division were involved in reaching the settlement agreement on behalf of Hawaiʻi. Murata emphasized their commitment "to aggressively pursuing those who ignore medical necessity in favor of increasing profits at the expense of patients."
Hawaiʻi's Medicaid Fraud Control Unit receives funding from a federal grant totaling $3.67 million for fiscal year 2025. The federal share accounts for 75% while the state provides the remaining funds through the Medicaid Investigations Recovery Fund.