Nursing Home Lab Billing Fraud: Unnecessary Panels, Fictitious Tests and Inflated Travel

Nursing home lab testing mileage fraud means knowingly billing Medicare for specimen-collection travel that did not happen or for more travel than a technician made. The specimen can be real while the journey on the bill is invented. If you work in collection, laboratory operations or billing, you may know exactly where the claimed trip departs from the work your team did.

Other laboratory schemes put the falsehood elsewhere: an unnecessary panel, a test never performed or an insured person billed to an uninsured program. We trace the laboratory’s decisions and the nursing home’s decisions separately: who directed the order, the collection and the claim.

How Lab Billing Works in a Nursing Home

A nursing-home laboratory claim connects an order, a collection, any transport, the testing and the payer. Different businesses can handle different parts of that chain, and the resident’s Medicare coverage changes who gets paid.

The laboratory billing manual from the Centers for Medicare and Medicaid Services puts laboratory services for a covered Part A skilled nursing stay inside the facility’s payment. Medicare pays the nursing facility, and the facility’s contract governs payment to an outside supplier. The supplier’s work is an expense within that arrangement.

For residents without Part A coverage, the manual describes Part B arrangements in which either the facility or a reference laboratory bills for testing under the laboratory fee schedule. The same nursing-home address can therefore sit on claims with different payment paths.

A 1999 Monthly Labor Review paper explained why bundled nursing-home payments changed the incentive to inflate ancillary charges:

A facility receiving a bundled payment and a laboratory billing a separate service face different revenue opportunities. The payment arrangement tells us whose claim to examine.

When a Lab Bills Mileage for Each Nursing Home Specimen on the Same Trip

When a lab bills mileage for each nursing home specimen on the same trip, the allowance must be divided among the Medicare beneficiaries for whom a specimen collection fee is paid. The bill has to follow the eligible collection travel and the patients served.

Collection comes first. Medicare ties the fee to a trained technician drawing blood by venipuncture or collecting urine by catheterization from an eligible homebound patient or non-hospital inpatient. At a facility, the fee depends on qualified collection staff being unavailable. More tubes from the same draw do not mean more collection fees.

The travel allowance follows a payable collection fee. A courier picking up a sample someone else drew has transported a specimen. The manual excludes that pickup from the technician travel allowance. Several tubes from one patient also cannot turn the journey into several trips.

The manual identifies P9604 as the flat-rate allowance for travel of 20 eligible miles or less to and from one location. P9603 is the per-mile allowance for longer trips to one location or trips to several locations. Both are divided among the Medicare beneficiaries for whom collection fees are paid. Non-Medicare patients are excluded from the calculation, along with miles for personal errands, non-Medicare collections or stops where no collection occurs.

The collection codes identify a different service: 36415 for drawing venous blood and G0471 for drawing blood or collecting urine by catheterization from a skilled nursing facility resident. A collection code and a travel code describe different work. The number of tubes cannot stand in for the route traveled.

BestCare Billed for Journeys Its Technicians Never Made

The government’s complaint against BestCare Laboratory Services described local technicians collecting specimens in distant Texas cities, with some specimens then shipped by air for testing near Houston. The government alleged that the company billed as though technicians had driven from its Webster laboratory to collect them:

The complaint put an actual route beside the billed route. A technician logged 69 miles visiting four nursing homes. BestCare allegedly claimed 676 miles for that route by billing hypothetical travel. Medicare and the taxpayers behind it were paying for the invented distance. Another day’s claims represented over 4,000 miles of technician travel that the government said never occurred.

The alleged calculation changed from claim to claim. Sometimes BestCare billed a hypothetical one-way trip, sometimes a round trip. Sometimes it divided the mileage among patients, sometimes it did not. The government also alleged that the owner instructed staff to claim travel back to Webster for specimens tested at satellite or outside laboratories. The claimed return journey survived even when the specimen never needed to come back.

A whistleblower brought the BestCare qui tam case, and the government joined it. A court found that BestCare knowingly submitted false Medicare travel claims and entered judgment in 2018. The Justice Department’s August 2023 collection announcement described an agreement for $5.7 million in additional payments toward that judgment. The government had already collected $789,652 separately.

LabCorp’s Settlement Over Inflated Collection Mileage

Laboratory Corporation of America, known as LabCorp, paid $700,000 in a settlement announced in June 1997 over alleged overstated phlebotomist mileage for visits to homebound and nursing-home patients. The allegations concerned excessive Medicare travel reimbursement through its Florida laboratory operations.

For someone familiar with collection routes, the recurring question is concrete: how did the miles actually traveled become the miles billed?

Nursing Home Respiratory Panels Ordered Without Medical Necessity

Nursing home respiratory panels ordered without medical necessity were central to the government’s allegations involving Provista Health. The government alleged that access to nursing homes for COVID testing became an opportunity to bill for unnecessary respiratory pathogen panels, tests nobody requested and tests never performed.

In July 2024, a federal court entered default judgments totaling $26,341,951 against the laboratory companies and their owner after they failed to defend the case.

A panel groups laboratory tests together. Medicare requires clinical laboratory testing to be reasonable and necessary for diagnosis or treatment. For defined organ or disease panels, the manual also ties payment to the component tests actually performed and bars duplicate payment for tests already included in the panel.

The operational comparison runs from the requisition to the result and the claim. What did the clinician order for this resident? Which tests did the laboratory actually run? Which components reached the bill? An insider who sees the order and the billing system may know where a request for testing acquired additional charges. The resident’s clinical record supplies the connection between the testing and the medical need.

When a Lab Bills Specimen Collection After a Nursing Home Patient Dies

A lab bill showing specimen collection after a nursing-home patient’s death puts the collection date at the center of the claim. In the Provista matter, the government alleged claims with sample dates after beneficiaries had died.

The manual generally uses the specimen’s collection date as the laboratory test’s date of service, with specific exceptions for stored specimens and certain other testing. That makes the date attached to the sample consequential. The collection record, the laboratory’s receipt of the specimen, the resident’s status and the date represented on the claim describe different parts of the event.

Nursing Home COVID Testing and the Uninsured Program

Nursing home COVID testing claims to an uninsured program turn on the tested person’s insurance status. The government’s June 2024 complaint against LabQ Clinical Diagnostics alleged uninsured-program claims for insured people and double billing, including testing connected to nursing homes.

For an insider looking at insured residents’ claims, the insurance field and the program billed belong together. A whistleblower complaint concerning LabQ supplies a specific nursing-home example involving employees:

The complaint alleged that staff avoided collecting insurance information, ignored it when offered or told patients to report that they were uninsured. It also alleged that the laboratory represented Medicaid patients as uninsured and billed the uninsured program. Those allegations make the intake form and the billing destination part of the same transaction.

The alleged falsehoods extended to the specimen and the testing speed. The whistleblower complaint described lost samples replaced with fake samples for billing. It also alleged that when results took longer than two days, LabQ falsified records to claim it had met the rapid-testing turnaround. A test result, the identity of the sample tested and the time reported to the payer could each tell a different story.

What Evidence Is Needed to Prove Fraud?

The useful evidence connects the laboratory’s claim to the collection, testing and payment it describes, and to the people directing the discrepancy. A route log can contradict billed mileage. A collection record can identify the technician, the specimen and the patient status behind the fee. Orders, results and claim lines can show how the panel billed differed from the testing requested or performed.

Insurance information and billing instructions can reveal why an insured person’s test reached the uninsured program. Internal directions matter alongside the individual claim: BestCare’s complaint alleged instructions to bill hypothetical trips, while LabQ’s complaint alleged instructions to omit or disregard insurance. Those are the connections we examine with insiders who understand how the work actually moved through the business.

A Nursing-Home Lab Whistleblower’s Reward

A health care whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Under the BestCare collection agreement, the Justice Department announced that the whistleblower would receive about $1.3 million as part of that settlement.

You Know What the Lab Actually Did

If you know why a laboratory’s mileage, panels, specimen dates or payer claims do not match the work, speak to our whistleblower experts about the gap between the work and the bill. We build your strongest whistleblower case with you around the testing, the money and the decisions behind the bill. We bring in healthcare whistleblower lawyers who understand laboratory billing and nursing-home payment arrangements, and remain your partners throughout the case.