Health & Medicine

Quest Diagnostics settles Medicare fraud accusations

U.S. Attorney Benjamin Wagner
U.S. Attorney Benjamin Wagner Associated Press file

Quest Diagnostics Inc., an international leader in medical testing, has paid the federal government $1.8 million to settle accusations of Medicare fraud by the U.S. attorney’s office in Sacramento.

The settlement, announced Tuesday by U.S. Attorney Benjamin Wagner, resolves allegations that the company submitted duplicate reimbursement claims to Medicare for blood draws, and diagnostic and panel testing.

Medicare is the federal health program for seniors marking its 50th anniversary this year.

Quest facilities “knowingly submitted … false and fraudulent claims to the government, for the same test, performed on the same day, on the same patient,” according to a whistleblower’s complaint filed in Sacramento federal court.

According to Wagner, the practice violated the federal False Claims Act.

An investigation was triggered four years ago by whistleblower Elisa Martinez, who had worked as a phlebotomist at Quest’s patient service center in Red Bluff. She was hired on July 27, 2009, and within three months began raising questions about the double billing, the complaint says.

When she asked her supervisor why they were unnecessarily drawing multiple blood vials for the same tests on the same patient, her supervisor advised Martinez to “listen more and back up everybody,” according to the complaint.

She was placed on leave on Feb. 23, 2011, and terminated on June 6, 2011.

“Ms. Martinez felt a duty to stand up for what she knew was right and blow the whistle on what she knew was wrong,” said one of her attorneys, Michael Hirst, in an interview Tuesday with The Sacramento Bee “We need more people willing to do that.”

Another of Martinez’s lawyers, Michael Behn, said, “We worked closely with federal investigators to comb through the billing data to confirm what our client saw and collect back from Quest everything taxpayers were due.”

The False Claims Act allows private citizens to bring civil actions on behalf of the government and share in any recovery.

Martinez will receive $358,000 of the recovered funds, Wagner said.

“In certain extremely rare instances, IT issues affected Medicare’s reimbursement for certain test codes that resulted in duplicate payments to Quest,” company spokesman Dennis Moynihan said Tuesday in an email. “The amount at issue in this case represents a minuscule percentage (less than 1/100th of 1 percent) of the total amount that Quest is reimbursed by Medicare each year.

“We are in the process of updating these billing systems to prevent this from happening in the future.”

Headquartered in Madison, N.J., Quest boasts on its website “the most extensive clinical testing network in the United States,” operating laboratories in most major metropolitan areas as well as outside the U.S.

Quest reported 2014 revenue of $7.4 billion. It is traded on the New York Stock Exchange and closed Tuesday at $65.31 a share, down $2.

Denny Walsh: 916-321-1189