Gamma Healthcare: A Urinalysis Order Converted Into a PCR Panel

In the Gamma Healthcare settlement, the Missouri laboratory and three owners agreed to pay $13,619,660 to resolve allegations that they billed Medicare for unrequested, medically unnecessary urinary tract infection PCR tests. Physicians ordered a urinalysis with culture and sensitivity, or a culture alone. The government alleged that Gamma added a PCR panel automatically and designed its requisition forms so physicians could not opt out. The whistleblower’s complaint went further: even an explicit instruction against PCR allegedly failed to stop it.

The Department of Justice announced the civil settlement on March 27, 2024. Gamma operated from Poplar Bluff, Missouri. A physician who owned healthcare clinics and treated patients whose tests went to Gamma brought the qui tam case. He could see what his practices requested and what the laboratory sent back.

What Gamma Added to a Urinalysis Order

The alleged addition was a panel of urinary tract infection PCR tests. The settlement covered allegations involving Medicare claims from January 1 through October 31, 2020. The requested urinalysis and culture became the occasion for a separate set of tests the treating physician had not selected.

The whistleblower’s complaint describes the work that brought the specimen into the laboratory. A nursing home resident’s symptoms prompted contact with a physician or nurse practitioner.

According to the complaint, the physician began noticing PCR results alongside the urine cultures his practices had ordered. It alleged that Gamma had announced the automatic addition in a letter to nursing home customers:

Under that alleged policy, the laboratory chose the added test for the patient.

The Order That Said No PCR

One order in the complaint spelled it out in capital letters:

The complaint alleged that the sample took separate routes. Part went to a hospital laboratory for the regular urinalysis, while the rest went to Gamma for the added PCR testing. According to the complaint, a Medicare Advantage plan, Tribute, paid for Gamma’s tests in that example.

Why the Added PCR Panel Mattered

The Justice Department described the reimbursement incentive directly: on average, Medicare paid approximately $11 for a urinalysis with culture and sensitivity, but an additional $573 for the urinary tract infection PCR panel. Medicare paid the larger bill for tests the physician allegedly had not requested.

According to the complaint, one panel covered seventeen separately billed organism tests.

The complaint alleged that Gamma’s owners directed the additional testing to increase revenue.

Who Directed the Testing and Billing

The complaint placed responsibility with owner-executives who controlled the laboratory’s work. It identified one as Gamma’s chief executive and board chairman, and another as its president and chief operating officer. The latter allegedly sent the customer letter announcing the automatic testing.

The whistleblower alleged that these owners directed technicians to perform the PCR tests and directed billing staff to submit the claims. For each unordered PCR claim, the complaint alleged, Gamma certified that the services were medically necessary. The order and the payment claim allegedly told different stories about the same test.

The government’s announcement adds that physicians raised concerns with Gamma as early as March 2020. They objected that they had not ordered the tests, that the tests were expensive and that they were not medically necessary. The alleged problem had reached the company through its own customers.

How the Requisition Allegedly Controlled What Reached Medicare

Gamma’s alleged form design removed the choice that mattered: whether the treating provider wanted the added PCR tests. Medicare’s ordering requirements tie diagnostic testing to the practitioner treating the patient’s particular medical problem.

A provider’s conditional order can specify an additional test if the first result meets a condition the provider sets. In Gamma’s case, the complaint described orders for a urinalysis with culture if indicated, followed by PCR results the provider had not requested. The condition written by the provider and the addition chosen by the laboratory were different decisions.

Model Plan Helps Laboratories Fight Fraud, published in Laboratory Medicine in 1997, described recommendations for annual notices to ordering physicians. Those notices were to identify the individual tests in laboratory profiles, their billing codes, Medicare payment limits and how the laboratory would bill them. The point was to make the contents and billing of the profile visible to the physician.

Gamma’s alleged practice shows why that information matters. A physician ordering a familiar urine workup could receive a much broader set of results and generate a much larger claim.

The Added-Test Pattern Beyond Gamma

Other laboratory cases show how an order can become a vehicle for extra testing. In the Meris Laboratories settlement announced in 1997, the government alleged that the laboratory routinely added unnecessary HDL cholesterol and serum iron tests to automated panels and billed them separately even though physicians had not specifically ordered them. The extra tests traveled with work the physician had requested.

The Bostwick Laboratories owner’s 2016 settlement addressed allegations that the laboratory performed additional reflex testing on urine specimens without the treating physician’s knowledge or consent.

The Gamma Healthcare Settlement and Whistleblower Reward

The complaint said Gamma announced in November 2020 that it was ceasing operations nationwide. The later civil settlement resolved the Medicare testing allegations against Gamma and three owners. Gamma and two of those owners, the chief executive and the president identified in the complaint, also agreed to a 15-year exclusion from federal health care programs.

The physician who brought the case was allocated approximately $2.3 million from the settlement proceeds. The case began on the ordering side of the business, with a physician caring for patients whose laboratory work went to Gamma.

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

What Evidence Is Needed to Prove Fraud?

For an alleged testing practice like Gamma’s, we compare the order that excludes PCR, the resulting PCR report and the claim for that work. The complaint’s patient examples connected those records to actual payments, while its customer letter and executive-direction allegations explained why the additional testing occurred.

If you saw the directive that kept generating PCR work inside the laboratory, we can examine how that decision reached Medicare with you.

You Know What the Physician Ordered

If your laboratory keeps adding PCR tests that providers did not request, talk with our whistleblower experts about the orders and instructions you have seen. We work with you to build your strongest laboratory fraud whistleblower case around those decisions, bring in laboratory fraud whistleblower lawyers who understand Medicare testing claims, and remain your partners throughout the case.