LabCorp: One Route, a Full Round Trip for Every Patient

In the LabCorp nursing home mileage fraud case, Laboratory Corporation of America paid $700,000 to settle allegations that it overstated Medicare travel charges for collecting blood from homebound and nursing-home patients. For a phlebotomist or billing employee, the revealing document was the requisition form. The whistleblowers alleged that a mileage code on that form turned a route serving several patients into a full round trip billed for each one.

The LabCorp Settlement Covered Florida Collection Trips

The Department of Justice announced the payment on June 17, 1997, resolving allegations involving Florida facilities formerly owned by LabCorp’s subsidiary, National Health Laboratories. The government alleged overstated mileage from 1989 through 1996. The settlement covered specimen-collection travel to both homebound and nursing-home patients.

Florida Medicare reimbursed laboratories by the mile for phlebotomists driving their own vehicles to draw blood. In this form of nursing home lab billing fraud, the overstated distance increased what Medicare paid the laboratory, according to the government. Taxpayers paid for miles the collectors had not driven.

Two employees brought the qui tam case. The complaint identified their work at the Hollywood, Florida offices: one was a nursing-home coordinator and the other a phlebotomist. Their account connected the collection work to the information the laboratory used for billing.

How the Mileage Code Replaced the Route

The whistleblowers alleged that LabCorp supplied mileage codes representing the round-trip distance between a facility and the laboratory designated to receive its specimens. Phlebotomists entered the code on a requisition form for each patient. The alleged instruction repeated the full journey for every patient at the stop:

Prorating meant dividing the mileage among the patients served on the trip. The alleged instruction put the whole distance on each patient’s form. Collecting another sample at the same nursing home did not require driving back to the laboratory and out again, but the billing allegedly charged for that journey again.

The route itself also differed from the route represented by the code. According to the complaint, phlebotomists left their own homes, visited facilities in succession and sometimes left the specimens at a collection point for a courier. They did not return to the laboratory between stops. Yet the alleged coding instruction disregarded actual mileage, where the technician started and where the technician handed over the samples.

The requisition form traveled with the specimen. The complaint described forms reaching a main laboratory directly or through a satellite laboratory, then supplying the information used to bill insurers, including Medicare. That is the connection that makes an internal collection form consequential: the mileage written beside the sample reached the payment claim.

The Expense and the Patient Also Mattered

The complaint also alleged that LabCorp claimed travel expenses it had not borne. Independent-contractor phlebotomists paid their own travel expenses, and the company allegedly billed Medicare for those expenses without reimbursing the contractors.

The whistleblowers also said some travel claims concerned assisted-living residents who were not homebound, even though the claims represented qualifying collection visits.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The LabCorp announcement said the two employees who brought the case would receive a joint whistleblower reward.

What Evidence Is Needed to Prove Fraud?

For a mileage case, the useful evidence connects the actual collection trip to the mileage submitted for payment and the instructions behind it. LabCorp’s complaint supplies a specific chain: the collector’s route, the patient requisition, the assigned mileage code and the resulting Medicare claim.

A phlebotomist may know where the day began, which facilities shared a route and where a courier took over. A billing employee may know how a requisition’s mileage code became the units on a claim. Those accounts explain why the route and the bill diverged, especially when the same code followed every patient regardless of the trip actually made.

The alleged instruction to use the code regardless of actual travel connects the repeated claim to a decision inside the laboratory.

Our work in proving nursing home fraud brings those pieces together with the insider who understands them. The code’s meaning matters as much as the number: what distance it represented, who assigned it and how the laboratory used it to obtain payment.

The Payment Setting Changed After the LabCorp Case

The LabCorp complaint described claims under Medicare Part B. The settlement preceded a change in how Medicare paid skilled nursing facilities for care and ancillary services.

The Bureau of Labor Statistics paper Health services industry: still a job machine?, published in Monthly Labor Review in 1999, described the nursing-home prospective payment system introduced in July 1998. It said that system made it harder to increase charges by manipulating Medicare’s billing rules for ancillary services.

The later Part A consolidated billing arrangement bundles laboratory services into Medicare’s payment to the skilled nursing facility unless an exclusion applies.

BestCare Put the Route Log Beside the Claim

The government’s complaint against BestCare Laboratory Services put a technician’s 69-mile log for four nursing homes beside 676 miles claimed for that route. The allegation showed the discrepancy in the laboratory’s own operating records.

The government also alleged that BestCare billed technician travel for specimens shipped by air without a technician accompanying them. Sometimes the company divided hypothetical mileage among patients, and sometimes it did not. The comparison concerns both the journey and its allocation across claims.

In 2018, the court entered judgment after finding that BestCare knowingly submitted false Medicare travel-allowance claims. The route log in that case shows why an insider’s account of the work matters: it puts the miles traveled beside the miles taxpayers were asked to fund.

You Know Where the Trip Ended

If you know how a collection route became mileage that Medicare should never have paid, speak to one of our whistleblower experts about how the miles were billed. We work beside you to build your strongest Medicare whistleblower case around the actual trips, the payments and the people directing the billing. We bring in healthcare whistleblower lawyers with laboratory-billing experience and remain your partners as the case moves forward.