Universal Oral Fluid Labs: The Referral Checks Behind the Drug Tests

The Universal Oral Fluid Labs fraud cases included a $911,137 settlement with a referring physician over alleged drug-testing kickbacks and false Medicare claims. The Greensburg, Pennsylvania laboratory paid for referrals, according to the government’s civil allegations and its owner’s separate criminal admissions. The same business relationship brought testing revenue into the lab and cash back to a referring physician. Medicare and Kentucky Medicaid paid for testing business that, according to those accounts, the lab bought from referring doctors.

Do Doctors Get Kickbacks for Ordering Tests?

Universal Oral Fluid Labs’ owner admitted paying a physician for drug-testing referrals in his criminal guilty plea. The Justice Department’s account of that plea, announced in June 2020, described an arrangement running from October 2011 through August 2013. The owner operated the clinical drug-testing laboratory and agreed to make cash payments for patients referred to it, including patients covered by Medicare and Kentucky Medicaid.

The civil case against a Mount Dora, Florida physician showed how the referral payment reached the claim. The government alleged that Universal Oral Fluid Labs paid the doctor to refer patients for drug tests, then submitted the resulting claims to Medicare. The government pursued those testing bills as false claims. The alleged kickback and the bill to Medicare were parts of the same transaction.

The Kentucky Physician’s Referral Payments

The owner’s admissions tied cash paid to a Kentucky physician directly to her drug-testing referrals. In its July 2021 account of his guilty plea, the Justice Department said that he caused Universal Oral Fluid Labs to pay her $843,242 in kickbacks. In that same account of his admissions, the department said Universal Oral Fluid Labs obtained $1,670,470 from Kentucky Medicaid between September 2012 and August 2013 based on those referrals.

Public health care money came into the laboratory, and cash went back to the physician who sent the patients. An insider who knows how compensation was calculated can explain what the lab was buying.

We examine that connection with the person who saw it. A compensation agreement can explain what the laboratory promised to pay for. The payments can show what it actually paid. The referrals connect those decisions to the patients whose testing generated the claims.

The Medical Director and the Other Referring Physicians

Universal Oral Fluid Labs’ medical director also pleaded guilty to related criminal charges, according to the HHS Office of Inspector General’s May 2018 notice.

Three other physicians, practicing in Pennsylvania, Florida and Indiana, separately agreed to settlements totaling $700,000. The government alleged that each received improper payments for referrals to Universal Oral Fluid Labs and caused false Medicare claims for drug-testing services.

The separate Florida settlement involved a physician practicing in Mount Dora. He also signed an agreement with the HHS Office of Inspector General requiring regular monitoring of his billing practices for three years. That settlement reached beyond a payment to address the referring practice’s billing.

Together, these physician-side cases show why someone inside a referring practice can matter to a laboratory fraud case. The lab submitted the claims, but the government also pursued the physicians alleged to have accepted money for directing the business there.

Why Drug-Testing Referrals Were Worth Buying

Toxicology supplied a substantial market for referral business. In its review of definitive drug testing from 2016 through 2020, HHS-OIG reported that Medicare Part B paid approximately $3 billion. Most services were for beneficiaries receiving pain-management treatment.

The incentives also appear in the urine-testing market. The 2014 Pain Physician paper Ethical Perspectives on Urine Drug Screening for Pain Physicians describes testing used to monitor adherence to prescribed medication and to identify use of other drugs. The paper points to the financial incentive behind routine screening:

The clinical purpose matters as much as the referral destination. The ordering practitioner keeps the medical justification in the patient’s record, while the laboratory holds the information it received with the order. A physician-office insider may see why a test was ordered and how its results were used. A laboratory insider may see the claims and the payments back to the practice. We bring those accounts together when assessing the healthcare fraud concern.

What Evidence Is Needed to Prove Fraud?

We work with you to connect the compensation arrangement, the physician’s referrals and the laboratory’s claims. The question is what the payments bought, who authorized them and which testing business followed.

The lab owner’s criminal admissions make that inquiry concrete. He described paying cash for patients referred to his laboratory, with Kentucky Medicaid reimbursements arriving from those referrals. A physician-office employee may understand the referral decision. A laboratory billing or finance employee may understand the claims or the payments back.

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

You Know What the Referral Payment Bought

Talk with our whistleblower experts about the laboratory payments you saw tied to patient referrals. We build the case with you and bring in laboratory fraud whistleblower lawyers who understand referral payments and testing claims. We stay beside you as your knowledge of the business becomes the foundation of your case.