Quest Diagnostics Resolves Lawsuit

Federal prosecutors in Sacramento announced today that Quest Diagnostics has paid $1.79 million to resolve a lawsuit.

Quest is a national company that operates medical labs where people go for blood tests and other procedures, including about 20 labs in the Sacramento area.

The case against Quest was investigated by the U.S. Attorney's Office in Sacramento. Catherine Swann was the lead prosecutor.

"It was a whistle blower case under the False Claims Act," says Swann. "And it alleged fraudulent conduct involving duplicate billing at the Quest Diagnostics facilities."

The settlement resolves allegations that Quest double-billed the federal Medicare program. The whistle blower will get $358,000 of the recovery proceeds.

"Our office diligently works to address fraud and we have enforcement actions," says Swann. "This is one example of a health care fraud enforcement action that is a result of this qui tam."

Qui tam is the legal term for a whistle blower who files a lawsuit against a company.

"It's not a huge settlement," says Swann. "But it's an important settlement because it stopped conduct that was ongoing."

Quest denies any wrongdoing and says IT problems affected Medicare's reimbursement for certain test codes. And that resulted in duplicate payments to the company. Quest says it's updating billing systems to prevent it from happening again.