By Kirell Lakhman
LabCorp will pay California $49.5 million to settle a Medicaid-fraud suit the state filed after being tipped off by a whistleblower at a rival lab.
The settlement goes back to 2005 when northern-California-based rival Hunter Laboratories told Medi-Cal, the state's Medicaid program, that LabCorp was charging it more than five times what it billed other customers for certain tests.
The case had been under seal until Burlington, NC-based LabCorp decided to settle.
California's Department of Health Care Services eventually began an independent audit of every clinical lab in the state, a move that is "expected to save Medi-Cal hundreds of millions of dollars" through changed pricing.
Similar cases are still pending against three other defendants, none of which was disclosed, according to the state.
"In this time of difficult public budgets, we will make it a high priority to track down those who engage in excessive charges, false claims, or illegal kickbacks of Medi-Cal funds," said California Attorney General Kamala Harris.
Other reports claimed LabCorp also gave healthcare providers kickbacks or offered discounted or free tests in exchange for referrals.
LabCorp's settlement comes three months after its chief rival Quest paid $241 million to settle a civil lawsuit accusing it of overbilling Medi-Cal.
Separately, the Madison, NJ-based reference lab is also on the hook for allegedly ripping off Medicare to the tune of "hundreds of millions, if not billions, of dollars in a massive Medicare fraud scheme" fueled by "kickbacks and false claims."
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