Last month, Laboratory Corporation of America (LabCorp) agreed to settle allegations that it overbilled the U.S. Department of Defense (DOD) for genetic tests performed by GeneDx, LLC (GeneDx), a third party laboratory used by LabCorp to perform genetic testing for military personnel. These tests included testing that screens for genetic abnormalities in fetuses and parents. 

A former LabCorp employee acted as whistleblower and bought the claim under the qui tam provisions of the False Claims Act. The whistleblower alleged that LabCorp and DOD entered into a contract wherein LabCorp would perform lab testing for DOD facilities worldwide. However, certain specialized tests, including the genetic testing at issue here, were outsourced by LabCorp to GeneDx. GeneDx would invoice LabCorp, and LabCorp would in turn invoice DOD. 

The allegations are that LabCorp improperly double and triple billed DOD for the genetic tests performed by GeneDx, and that LabCorp was later unable to locate evidence that supported the invoices. Further, the whistleblower alleged that when LabCorp internally realized it was improperly overbilling DOD, LabCorp declined to return the overpayments and instead only offered a credit for those tests and a pledge to fix the issue going forward. 

There were allegedly $210,959 in overcharges on 38 tests, including $113,525.50 for 21 tests billed between March 2016 and January 2017. LabCorp agreed to settle the allegations for $2.1 million, of which the whistleblower will receive $357,000. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and litigation.  If you need assistance with such a matter, please contact us today.