Labcorp Agrees To Pay $19 Million To Settle Whistleblower Allegations

Laboratory Corporation of America Holdings, one of the nation’s largest providers of clinical laboratory services, has reached a settlement with the U.S. government, agreeing to pay $19 million to resolve allegations that it violated federal statutes by submitting false claims to Medicare.

The case alleged that Labcorp participated in a conspiracy in which two other companies, Health Diagnostic Laboratory Inc. and Singulex Inc., paid kickbacks to healthcare providers to induce the providers to refer patients to their labs. Labcorp then purportedly provided blood draw services to those providers. According to the allegations, healthcare providers were paid kickbacks disguised as “draw fees” or “process and handling” fees. The government claimed that such payments and the ensuing submission of bills to Medicare violated the federal False Claims Act. 

The False Claims Act is a federal law that imposes liability on individuals and companies that defraud the federal government. The act allows private citizens, known as "relators" or "whistleblowers," to file a lawsuit on behalf of the government and receive a portion of any recovery. For example, the whistleblowers received approximately $5.6 million of the $19 million settlement in this case. 

Whistleblowers are vital in uncovering fraud and misconduct in government contracting and healthcare programs. Whistleblowers may also be entitled to protection from retaliation by their employers under the False Claims Act.

In announcing the settlement, U.S. Attorney Adair F. Boroughs for the District of South Carolina said, "Healthcare decisions should be based on what is in the best interest of the patient, and not on financial incentives and related schemes." Boroughs added that the efforts by whistleblowers, like those involved in this case, "are essential to protecting the integrity of our Medicare system."

The whistleblower lawsuit process typically begins with an individual who has knowledge of fraud or misconduct involving government funds. The individual may file a lawsuit under seal in federal court and provide the government with evidence of the fraud. The government then investigates the allegations and decides whether to intervene in the lawsuit.

Ross Feller Casey is recognized as one of the nation's leading whistleblower law firms, having originated some of the most significant qui tam lawsuits in the U.S.

Our leading whistleblower attorneys understand the personal and professional risks you are taking to expose fraud against the government. Contact our office today for your free consultation with an experienced whistleblower attorney.

As with all of its cases, Ross Feller Casey handles whistleblower actions on a contingency basis, meaning there will never be a cost to you unless there is a financial recovery in your case.