American Toxicology: The Operator Missing From the Applications

American Toxicology fraud involved Medicare and Medicaid applications that named the operator’s wife as owner while leaving his participation out, the Justice Department said in announcing the couple’s health care fraud guilty pleas. Inside the laboratory, he made employment decisions and negotiated business arrangements with providers. An employee dealing with the person who ran the business would have seen something the enrollment applications left out.

The government’s June 24, 2020 plea announcement described American Toxicology Labs in Johnson City, Tennessee. The company performed urine screens for entities that represented themselves as opioid treatment facilities.

The Owner on Paper and the Person Making Decisions

The Medicare and Medicaid applications identified the wife as owner and omitted her husband’s participation, according to the Justice Department’s plea announcement. The couple established American Toxicology Labs in May 2013, with the wife serving as registered agent. The laboratory used their home as its principal office and mailing address.

The same announcement describes the husband’s management work during the period when government programs paid the laboratory. He made employment decisions, negotiated with providers and otherwise participated in management.

That is the discrepancy an insider can recognize. The paperwork and the workplace told different stories about who was involved.

For someone inside a laboratory, the useful knowledge may sit in ordinary work: who made an employment decision, who discussed the terms with a provider, whose instructions governed the account. We connect that account of the business to what the laboratory told the programs paying it.

Public Programs Paid for the Urine Screens

In announcing the guilty pleas, the Justice Department said that Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare paid American Toxicology approximately $8.5 million between May 1, 2014, and January 31, 2020. The laboratory listing the couple’s home as its office was collecting public money while leaving one of its managers off its applications.

The 2014 Pain Physician paper Ethical Perspectives on Urine Drug Screening for Pain Physicians describes testing used to monitor adherence to prescribed medication and identify use of illicit drugs. American Toxicology’s plea announcement shows the business interests behind that testing: the operator helped manage the laboratory and received money from third parties for referrals.

Referral Payments Reached a Personal Account

The plea announcement describes the operator receiving $441,646 in kickbacks from third parties for referring people to them. Federal healthcare programs paid for the referred services, in whole or in part, while the referral recipients paid the operator personally. The kickback payments went into the couple’s personal checking account.

A referral ledger and a personal bank deposit can explain a relationship that a laboratory’s test claim alone does not show.

What the Pleas and the Business Records Show

The Justice Department announced health care fraud guilty pleas by both the operator and the registered owner. Its account tied the applications to the operation behind them and described referral payments reaching their personal account. For an insider considering a laboratory fraud whistleblower case, those connections are more useful than the company’s paperwork viewed alone.

We work with the person who knows how those records came into being. An employee who dealt with management may know who exercised control. Someone involved in provider relationships may know who negotiated the arrangement and where referrals went. A biller may see the claims, while a technical employee understands the testing behind them. The strongest account connects those views to the same business decisions.

American Toxicology shows why the inquiry can begin before a specimen arrives. The applications describe the business entitled to seek payment. The management decisions show who participated in that business. The referral payments show a further financial interest in where patients went. Together, those connections explain the conduct described in the criminal case.

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

You Know Who Ran the Laboratory

If you know who controlled the laboratory, negotiated the referrals or received the payments, speak to one of our Whistleblower Experts. We build your case around the decisions you saw, bring in laboratory fraud whistleblower lawyers who understand Medicare and Medicaid billing, and stay beside you throughout the case.