$14.5 Million: The Urine Drug Test Panel Medicare Says Billed for Tests It Didn't Need

Laboratory Corporation of America, the national clinical diagnostics company known as Labcorp, has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare Part B for medically unnecessary urine drug testing conducted under a Labcorp testing panel called "ToxAssure Comprehensive."DOCUMENTED

The settlement resolves allegations covering a period from January 1, 2018, through November 22, 2023, during which the government contends Labcorp routinely billed Medicare for both presumptive and definitive urine drug testing for the same patient, on the same date of service, using the same urine sample.DOCUMENTED

Presumptive versus definitive testing

Urine drug testing generally falls into two categories. Presumptive testing detects the likely presence or absence of certain classes of drugs, typically using a screening method that flags results above a set threshold. Definitive testing goes further, identifying specific individual substances and, where relevant, their exact concentrations in the sample.DOCUMENTED Because definitive testing is more resource-intensive and specific, it is generally billed at a higher rate — and is typically appropriate only when a presumptive result is unclear, unexpected, or otherwise requires confirmation.REVIEWED

The government's allegations center on Labcorp's ToxAssure Comprehensive offering, which the government says led to the routine billing of both a presumptive test (billing code 80307) and a definitive test (billing code G0483) together, for the same patient, same date, and same urine sample — a combination that, according to the Justice Department, resulted in some of the definitive testing being medically unnecessary because it was performed automatically as part of a fixed panel rather than triggered by a specific clinical need identified in the presumptive result.DOCUMENTED

Cooperation credit

"The government expects that any testing it pays for is medically necessary and not wasteful or structured in a way that maximizes billing opportunities for providers at the expense of the federal fisc," said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division.DOCUMENTED

As part of the settlement, Labcorp represented that it has ceased billing Medicare using the combination of the two codes for beneficiaries tested under the ToxAssure Comprehensive panel.DOCUMENTED Labcorp received credit under the Justice Department's guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases — a framework, laid out in the Justice Manual, that can reduce a company's ultimate settlement exposure when it cooperates proactively with an investigation and takes independent steps to fix the underlying practice before or during the government's review.DOCUMENTED

The government's theory did not turn on whether either type of test was appropriate on its own — it turned on whether billing both, automatically, for every patient, made clinical sense.

Part of a broader pattern in lab billing enforcement

The Labcorp settlement was announced the same week as a separate $30 million settlement involving an Arkansas pathology laboratory accused of kickbacks and unnecessary medical testing, reflecting sustained Justice Department attention to how diagnostic laboratories structure test panels and billing codes.REVIEWED Bundled testing panels — where a lab offers a standardized combination of tests as a single product, rather than ordering each test individually based on a specific clinical indication — have drawn recurring scrutiny in False Claims Act enforcement, because the bundling itself can obscure whether every component of the panel was medically necessary for every patient it was billed for.REVIEWED

The resolution was the result of a coordinated effort between the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney's Office for the District of Massachusetts.DOCUMENTED As with other False Claims Act settlements, the claims resolved are allegations only, and there has been no determination of civil liability against Labcorp.REVIEWED

What changes going forward

Beyond the payment, the practical effect of the settlement is Labcorp's confirmed discontinuation of the specific two-code billing combination tied to ToxAssure Comprehensive — meaning future definitive testing under the panel would need to be independently justified rather than billed automatically alongside the presumptive screen.REVIEWED For a company that operates one of the largest clinical-testing networks in the country, the case is a reminder that panel-based test bundling, even when clinically defensible in some cases, carries billing risk when it results in tests being charged to Medicare without an individualized medical justification for each patient.REVIEWED

The billing-code mechanics behind the case

Medicare's billing structure treats presumptive and definitive urine drug testing as distinct, separately payable services precisely because they are meant to serve different clinical purposes — a presumptive screen as an initial, lower-cost check, and a definitive test as a targeted follow-up when the screen's result requires confirmation or further specificity.REVIEWED When a laboratory's own panel structure results in both codes being billed together as a matter of routine, rather than as a clinically driven two-step process, the government's position is that the automatic pairing itself — not the individual tests — is what turns otherwise legitimate testing into a medically unnecessary billing pattern.REVIEWED

Multi-year billing-pattern cases like this one are typically built from claims-data analysis rather than from a single whistleblower complaint or patient story: investigators compare how often a given code combination was billed against clinical guidelines for when the combination should occur, then look for statistical patterns that suggest the combination became the default rather than the exception.REVIEWED That data-driven approach has become increasingly common in Medicare billing-fraud enforcement generally, allowing the government to identify systemic billing patterns across millions of individual claims without needing to establish that any single test was ordered in bad faith.REVIEWED

For patients and referring physicians, the case is a reminder that a lab's branded test panel — a marketing bundle with its own product name, like ToxAssure Comprehensive — is not automatically equivalent to a single clinically necessary order. Panels that bundle a screening test with a confirmatory test under one name can make it harder for both providers and patients to see that two separate, separately billed services are involved, and that each one carries its own medical-necessity requirement under Medicare rules regardless of how the laboratory packages or names the combined offering.REVIEWED

Have documents relevant to this story? Reach us through our tips channel.