On October 17, 2022, the United States Department of Justice (DOJ) announced a $13 million settlement with health care services provider Sutter Health, which arose from alleged violations of the federal False Claims Act (FCA). These alleged FCA violations relate to Sutter Health billing the United States for toxicology screening tests performed by other labs.
According to the DOJ, under the terms of the contract entered into by Sutter Health Hospital and Navigant Network Alliance, LLC (Navigant), Navigant referred toxicology specimens obtained from physicians and laboratories across the country to Sutter. It is alleged that Sutter then submitted bills, or caused bills to be submitted, for the reimbursement of the qualitative and quantitative testing for the tests, even when the quantitative tests were performed by third-party labs. The DOJ maintains that from August 1, 2016, through June 30, 2017, Sutter billed for urine toxicology tests it did not perform and then was paid for the testing by various federal health care programs.
This settlement agreement resolves the claims that the United States might have brought in a civil lawsuit based on these allegations. This DOJ enforcement action highlights the need for clinical laboratories to focus on ensuring compliance with its relationships, reference billing, and other billing practices.