Acculab Laboratories: Allegations of Tests Not Ordered, Services Not Provided

In the Acculab laboratory fraud settlement, Sarasota, Florida-based Acculab Laboratories and its president and owner agreed to pay $461,000 over allegations of false Medicare claims for tests not ordered, not provided, not medically necessary, or improperly unbundled. A test can appear on a bill without an order behind it. A result can exist without a medical reason for the test. And the billing can inflate the price of work the lab actually did.

The Justice Department announced the settlement on March 17, 2008. It alleged that the laboratory submitted the claims at its president’s direction. A private citizen’s qui tam case brought the allegations against Acculab, and the settlement included a whistleblower reward.

What Acculab Allegedly Billed to Medicare

The government alleged that Acculab billed Medicare for laboratory services it never provided, as well as tests no clinician ordered. Medicare was being asked to pay for work the lab allegedly never did. Taxpayers foot that bill.

The allegation that the president directed the claims put management’s decisions at the center of the case. For an insider, instructions about what goes onto the claim can matter alongside the claim itself.

Tests Without an Order or a Medical Reason

Acculab’s settlement covered allegations of both unrequested and medically unnecessary services.

The June 1997 Laboratory Medicine article Model Plan Helps Laboratories Fight Fraud described federal guidance recommending requisition forms with space for physicians to document the medical necessity of each test. It also described notices explaining the components of laboratory profiles and how the laboratory would bill Medicare for them. The notices were to identify the billing codes and payment limits for the profiles, too. A physician ordering a group of tests would see what the laboratory intended to charge Medicare for that group. That puts the laboratory’s sales description beside its billing practices.

A billing employee may see the requested tests and the submitted claim together. A technician may know which tests the lab performed. The relevant comparison is specific to the billed service: who requested it, what work followed, and what Medicare was asked to pay for.

How Unbundling Charges Medicare More for the Same Work

Acculab’s settlement included allegations of improper unbundling alongside the allegations about services that should never have reached the bill.

The General Accounting Office explained the economics of laboratory panel unbundling in its 1998 report on Medicare billing practices. Automated equipment could perform multiple tests on a blood sample together, reducing labor and handling costs. The coding system reflected that efficiency through profiles generally reimbursed at less than the same tests billed individually under their own codes.

The alleged advantage in unbundling comes from the claim’s presentation. Medicare pays more for the same work when the components are improperly priced as separate services. A technician can therefore have performed the requested tests while the bill still misrepresents how Medicare should pay for them.

Adding a test is a separate practice. It expands what the lab bills beyond the requested work, while unbundling splits the price of work already included. Acculab’s alleged unrequested services and unbundled claims belong to different parts of that comparison.

Diagnosis-Code Guidance and the Separate Vista Case

Diagnosis-code manipulation shows how the stated medical reason for a test can become a billing decision. In its 1998 laboratory compliance guidance, the Office of Inspector General specifically addressed software that inserted diagnosis codes without diagnostic information from the ordering physician. It separately warned against reusing information from earlier dates of service and creating diagnosis information that had triggered reimbursement in the past. The billing system could supply a payable code without the clinician supplying a medical reason.

In a separate case involving Vista Clinical Diagnostics, the whistleblower’s complaint alleged that computer macros added diagnosis codes the ordering physician had not supplied.

What Evidence Is Needed to Prove Fraud?

Which records show the gap depends on where you sit inside the laboratory and how its billing works. Our whistleblower experts work through that with you, connecting what you know to the health care claims at issue.

The Laboratory Medicine article described auditing, record retention and the evaluation of supervisors and managers as parts of the federal model compliance plan. Those functions matter here because the laboratory’s own explanation of its billing can be compared with its actual practices. A written policy, the way staff are told to work and the claims that leave the billing department may tell different stories.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Lab Actually Billed

If you know who added the services, split the panel charges or directed the billing, speak with our whistleblower experts about what went onto the Medicare bill. We build the laboratory fraud case with you and bring in healthcare fraud whistleblower lawyers who understand Medicare laboratory claims. We stay beside you as the case moves from what you saw inside the lab to the pursuit of a recovery.