Attorney General Anne Lopez announced a major settlement in which Precision Toxicology, LLC, also known as Precision Diagnostics, Inc., has agreed to pay $27 million after allegations of fraudulent billing practices and kickback schemes involving urine drug testing. According to a news release from the State of Hawaiʻi, the laboratory was accused of submitting false claims to Medicaid for tests that were not medically necessary and offering illegal incentives to healthcare providers for referrals.
The settlement emerges from whistleblower lawsuits levied against the company and will also include interest payments distributed to multiple states and the District of Columbia as restitution for the misuse of Medicaid funds. These actions were purportedly aimed to artificially inflate revenue by exploiting the healthcare system. Precision is ordered to pay out, alongside Hawai‐i's $101,416.16 share specifically for instances of double billing the Medicaid program in the state.
In the details of the agreement, Precision's misconduct encompassed a policy of using blanket orders for urine drug testing without physician assessment of medical necessity. This practice persisted from January 1, 2013, through December 31, 2022. The settlement also addresses the company's alleged kickbacks—providing free point-of-care urine drug test cups in return for referrals—between January 1, 2013, and June 30, 2014. Such actions directly contravene the Anti-Kickback Statute, set to protect patients and federal healthcare programs from fraud and abuse.
Landon M.M. Murata, director of the Medicaid Fraud Control Unit in Hawaiʻi, was instrumental in reaching this settlement. "We are committed to aggressively pursuing those who ignore medical necessity in favor of increasing profits at the expense of patients, taxpayers, and Hawaiʻi’s critical healthcare programs," he stated, affirming to aimfully address similar deceptive practices that undermine the integrity of Medicaid, according to State of Hawaiʻi website.
Funding of the Hawaiʻi Medicaid Fraud Control Unit is through a federal grant, marking the importance of such agencies in monitoring healthcare operations. The grant for the Federal Fiscal Year 2025 stands at approximately $3.7 million with federal and state-coordinated funding. Aid such as this reinforces the unit's resources to continue its oversight and regulatory actions in the health sector.
