Baltimore City Wire

Precision Toxicology, also known as Precision Diagnostics, has agreed to a $27 million settlement to address allegations of violating the False Claims Act and related state laws. The company was accused of billing federal healthcare programs like Medicare and Medicaid for unnecessary urine drug tests and offering free items to physicians who referred laboratory testing business back to them.

Erek L. Barron, U.S. Attorney for the District of Maryland, emphasized the importance of pursuing those who misuse healthcare funds: “We aggressively pursue those who defraud these critical healthcare programs and take money meant for needy patients. Taxpayers deserve nothing less."

The Department of Justice underscored its commitment to ensuring that laboratory tests are medically necessary. Principal Deputy Assistant Attorney General Brian M. Boynton stated, “The Justice Department is committed to ensuring that laboratory tests are ordered based on each patient’s medical needs and not just to increase laboratory profits.”

The allegations included claims that Precision promoted "custom profiles" leading physicians to order excessive tests without assessing individual patient needs. Additionally, providing free urine drug test cups conditioned on sending specimens back for further testing was alleged to violate the Anti-Kickback Statute.

Acting U.S. Attorney for the District of Colorado Matthew Kirsch commented on protecting taxpayer interests: “When laboratories ignore medical needs and increase testing for their own profits, the Department of Justice will act to protect the taxpayers and the integrity of our vital federal health programs.”

Precision has entered into a five-year Corporate Integrity Agreement with HHS-OIG following this settlement. Maureen R. Dixon from HHS-OIG highlighted ongoing efforts against violations: “Today’s settlement demonstrates that investigating violations of the False Claims Act is a top priority.”

Of the total settlement amount, $18.2 million will go to the United States, while states including Maryland and Colorado will receive portions related to Medicaid shares.

This case stemmed from whistleblower lawsuits filed under qui tam provisions allowing private individuals to sue on behalf of the government. Bryce Hudak, one such whistleblower involved in these cases, will receive over $2.7 million from the recovery.

The resolution reflects coordinated efforts by multiple federal and state agencies led by the Justice Department’s Civil Division.

It should be noted that these resolved claims remain allegations without any determination of liability.