Calif. suing seven private med labs for alleged fraud

California Attorney General Jerry Brown is suing seven private medical laboratories, alleging they overcharged the state's Medicaid program as much as 400% for lab tests conducted over the last 15 years and costing the program hundreds of millions of dollars.

Brown is expected announce the details of the civil lawsuit against the companies today.

The lawsuit, originally filed under seal by an executive at a competing lab, seeks to recover at least $100 million worth of the excessive charges paid by Medi-Cal, the program that provides health services to the poor.

The lawsuit, which was filed under the False Claims Act, alleges massive fraud, illegal kickbacks and overcharging the state by as much as 400 percent for blood, urine and other tests.

Brown said he did not know why it took a whistle-blower to identify the widespread fraud against the program. He also could not say why criminal charges were not forthcoming if the companies had duped the government out of so much money.

"These are all good questions," Brown told the Los Angeles Times. "If there were these gross discrepancies, why wouldn't the state have jumped on this at an earlier point? If they were charging $8 for a lab test when competitors were charging $2, what was the state doing?"

What do you think? Post a comment on this article and share your opinion with other readers. Submit your comments to Modern Healthcare Online at [email protected]. Please be sure to include your hometown and state, along with your organization and title.