Massachusetts Laboratory and Its Owners Pay Over $1.5 Million to Settle False Claims Act Allegations
U.S. Attorney John H. Durham, Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of Inspector General, and Connecticut Attorney General William Tong today announced that CLINICAL SCIENCE LABORATORY, INC. and its owners, STANLEY ELFBAUM and LOUIS AMORUSO, have entered into a civil settlement agreement with the federal and state governments and have paid $1,508,106 to resolve allegations that they violated the federal and state False Claims Acts.
Clinical Science Laboratory, Inc. (“CSL”), located in Mansfield, Massachusetts, provides laboratory-testing services, specifically urine drug testing services, for substance abuse patients enrolled in the Connecticut Medicaid program. The government alleges that CSL, Elfbaum and Amoruso violated Connecticut’s so-called “Most Favored Nation” regulation (Conn. Agencies Regs. § 17b-262-649), which provides, in essence, that clinical laboratories should not seek payment from Connecticut Medicaid for services at a price that is higher than the lowest price the laboratory charges for the same or similar services from other third parties. Specifically, the government alleges that CSL regularly accepted payments from Connecticut Medicaid for urine drug screen testing at the rate of $38 per test, while at the same time charging substance abuse treatment clinics approximately $2 per test
To resolve the governments’ allegations under the federal and state False Claims Acts, CSL, Elfbaum and Amoruso agreed to pay $1,508,106, which covers claims submitted to the Connecticut Medicaid program from October 1, 2016, through May 23, 2017.
“We must ensure that taxpayers’ health care dollars used for substance abuse treatment are properly spent,” said U.S. Attorney Durham. “Clinical laboratories should not charge government health care programs a higher price than they charge to other providers for the same or similar services, and those who do so will be held accountable.”
“With the deadly impact of addictive drugs reaching crisis proportions, every dollar for treatment programs must be fiercely guarded,” said Special Agent in Charge Coyne. “Taxpayers and patients depending on state treatment programs should expect nothing less. Working with our state and federal partners, we will continue to hold accountable those who profit by overbilling Medicaid.”
“Clinical Science Laboratory was billing the state's Medicaid program 19 times what it charged to other customers—diverting taxpayer resources away from other critical needs. Connecticut has been disproportionately devastated by the opioid epidemic, and we must ensure we are getting the absolute most out of every treatment dollar spent,” said Attorney General Tong. “I want to thank our federal law enforcement partners and the DSS Office of Quality Assurance for their joint efforts in this investigation and strong settlement.”
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot, and Assistant Attorneys General Michael Cole and Gregory O’Connell of the Connecticut Office of the Attorney General.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.