Quest and LabCorp Face Virginia and Georgia False Claim Suits

Two recently unsealed whistleblower lawsuits allege that Quest Diagnostics, Inc. (“Quest”) and Laboratory Corporation of America Holdings (“LabCorp”) defrauded the Virginia and Georgia Medicaid programs. The whistleblower lawsuits were both filed under the qui tam provisions of the states’ False Claims Act statutes by Hunter Laboratories LLC and its chief executive officer Chris Riedel.

The complaints allege that Quest and LabCorp charged the Medicaid programs considerably higher rates than it charged non-Medicaid customers for the same lab tests. The whistleblowers cited an automated hemogram, a common blood test, as an example. It alleged that the companies charged Medicaid $10.42 for the test, but other patients were only charged $1.42 for the test.

Pursuant to state law, companies are required to provide services to Medicaid patients at the same rates billed to others.

The Virginia and Georgia complaints seek civil penalties for each false claim submitted to the states’ Medicaid programs. A similar lawsuit initiated by the same whistleblowers in California was settled in 2011 for $241 million from Quest and $40 million from LabCorp.