Labcorp Agrees to Pay $14.5 Million to Resolve False Claims Act Allegations

Laboratory Corporation of America (Labcorp), a national clinical diagnostics company, has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare Part B for medically unnecessary urine drug testing. The settlement, announced by the Justice Department, resolves claims that between January 2018 and November 2023, Labcorp routinely billed Medicare for a testing panel it marketed as “ToxAssure Comprehensive” in a way that resulted in overpayments for tests that were not medically necessary.

The government alleged that Labcorp’s ToxAssure Comprehensive panel combined presumptive urine drug testing with definitive testing for certain substances, often running both tests simultaneously on the same urine sample from the same patient on the same date of service. Labcorp then billed Medicare using CPT code 80307 for the presumptive test and HCPCS code G0483, which is the highest reimbursement tier for definitive testing and covers 22 or more drug classes.

The government further alleged that for several substances, Labcorp performed definitive testing without first conducting a presumptive test to determine whether additional testing was medically necessary. As part of the settlement, Labcorp admitted and accepted responsibility for these facts and represented that it has ceased billing the combination of codes for the ToxAssure Comprehensive panel. The company received credit under the Justice Department’s guidelines for its disclosure, cooperation, and remediation efforts. This case reflects the government’s sustained commitment to combating healthcare fraud and holding providers accountable when billing practices prioritize revenue over medical necessity and taxpayer protection.