Gambro’s Dialysis Laboratories: Allegedly Billing Again for Tests Medicare Already Covered

The Gambro laboratory fraud settlement in 2000 included a $40 million agreement for Gambro Healthcare Laboratory Services in Ft. Lauderdale over allegedly unnecessary dialysis tests and billing Medicare again for tests its dialysis payment already covered. A separate agreement for more than $13.1 million covered Dialysis Holdings Laboratory Services in Deland. For someone inside a dialysis laboratory, the distinction matters: the test could have been performed, the result could have reached the clinic, and taxpayers could still have paid twice for the same work.

Two Florida Laboratories, Two Agreements

Gambro Healthcare’s agreements covered laboratory services for patients with end-stage renal disease. In its July 13, 2000 announcement, the Justice Department identified the laboratories separately: Gambro Healthcare Laboratory Services in Ft. Lauderdale, Florida, and Dialysis Holdings Laboratory Services in Deland, Florida. The Deland operation had previously been known as Vivra Laboratory.

The government alleged that both laboratories billed Medicare, Medicaid and TRICARE for medically unnecessary tests. It also alleged that both double billed for tests already included in Medicare’s payments to dialysis clinics.

How Should Laboratory Tests Be Bundled for Medicare?

In the Gambro case, certain laboratory tests were already included in Medicare’s dialysis payment, yet the government alleged that the laboratories billed for them separately. The payment arrangement that covered the test was central to the claim.

The historical payment was called the ESRD composite rate. Medicare paid it to dialysis clinics, and it included specified laboratory work. According to the government’s account, the laboratories submitted additional bills for work that payment already covered. Calling the second bill a laboratory claim did not change what Medicare had bought with the first payment.

That makes the composite-rate allegation different from the unnecessary-testing allegation. One concerns whether a patient needed the test. The other concerns whether Medicare had already paid for it through the clinic. A review focused entirely on whether the laboratory ran the test would miss the second question.

The Historical 50% Rule

The historical rule described in the announcement prohibited dialysis laboratories from billing Medicare Part B for panels made up of more than 50% composite-rate tests. The government specifically alleged that Gambro’s Ft. Lauderdale laboratory violated that rule.

The contents of the panel mattered. A bill showing a panel’s name could conceal the payment question unless the reviewer also knew which component tests were included in the dialysis payment.

The industry’s own literature shows why a panel’s label was only the beginning. In June 1997, Laboratory Medicine published Model Plan Helps Laboratories Fight Fraud, describing federal recommendations that laboratories tell ordering physicians what each automated test profile contained, which billing codes the laboratory would use and how it would bill Medicare. The physician choosing a profile and the employee submitting its claim needed to be talking about the same set of tests.

The Gambro Laboratory Settlement Reported for Fiscal 2002

Gambro Healthcare Laboratory Services had a separate $3,000,000 settlement reported for fiscal year 2002, accompanied by an amendment to an existing corporate integrity agreement.

The 2000 settlement had already required Gambro and its laboratory subsidiary to enter a five-year corporate integrity agreement with the inspector general.

What the Order and the Claim Can Show

The physician’s records, the laboratory’s work and the payment claim tell different parts of the story. We connect them to understand where the billed service departed from the ordered care or from what Medicare had already paid.

Under Medicare’s laboratory documentation rules, the physician holds the medical justification and the laboratory keeps the information received and documentation showing that its claim accurately reflected it.

For the old Gambro allegations, the clinic’s dialysis payment adds another necessary comparison. The order and result concern the work requested and performed. The panel’s components and the payment arrangement explain whether that work was already included. The separate claim shows what the laboratory asked the government to pay again.

Repeated orders add a further question: whether the continuing testing still reflected what the physician wanted. The Laboratory Medicine article described recommendations to monitor standing orders for continued validity, along with tracking test use by billing code. A routine profile can keep producing work and claims, so the continuing order matters as much as the original selection.

Fresenius and Tests Repeated Against Doctors’ Orders

In its 2019 settlement, Fresenius agreed to pay $5.2 million over allegations of unnecessary hepatitis B surface antigen testing, including tests billed to Medicare against physicians’ orders, another example of recurring dialysis tests departing from the ordered care.

The Broader Gambro Civil Settlement

Gambro’s broader 2004 qui tam settlement, for in excess of $310 million in civil liabilities, included allegations that hard coded diagnosis codes generated bills for unnecessary medications and services, extending the billing concerns beyond the laboratory agreements.

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

You Know How the Tests Became Claims

If you saw dialysis tests billed twice, repeat testing that outlasted the doctor’s order or diagnosis codes supplied by the billing system, talk with our whistleblower experts. We work beside you to build the case around the decisions you witnessed and bring in healthcare fraud whistleblower lawyers who understand laboratory billing and dialysis payments. From that first conversation through the case, you have an experienced partner on your side.