A national lab promised doctors they could enrich themselves by as much as $2 million a year through a scheme that involved billing payers multiple times for the same urinary drug test, a whistleblower suit alleges.


Together with its clients, the referring physicians who participated in the scheme, the lab is being charged with one count of violating the federal false claims act and 15 counts of breaking false claims laws in various states and the District of Columbia. If convicted, the defendants face civil and criminal penalties, including treble damages for each false claim.


The lab, San Diego-based Millennium Laboratories, specializes in medication monitoring and markets urinary drug testing services to clinicians who treat chronic pain. The in-office testing can guide physicians in assessing whether patients are getting relief from their pain, as well as help cut down on abuse. The lab profits slightly from selling the screens to physicians who in turn bill for it, and from performing confirmations.


The whistleblower, Robert Cunningham, who is described as working for a rival lab, passed away in December. The case is being brought in Massachusetts District Court by his estate.


Plaintiffs revised their 2009 complaint this year, paring it down from 60 pages by dropping some contentions, and Millennium was served a summons in connection with the 53-page amended complaint on June 14. The case was unsealed in March, after which the Justice Department filed a notice saying it won’t intervene, omitting an earlier “at this time” caveat, making it seem unlikely the federal government will join the suit.


Millennium chief counsel Martin Price told MM&M that the plaintiff’s allegation is “incorrect” and that his firm will be filing a motion to dismiss the suit “in the next 15-20 days.”


Under a physician billing model it promoted to attract physician referrals, “Millennium explains that by employing the use of a multi-class qualitative drug screen which uses a single specimen, the physician can bill both government and private health insurance companies for the multiple drug classes detected by the test kit,” the suit claims, adding that this may violate a federal anti-kickback statute.


If true, the allegations would mark the latest corporate marketing misdeed in the pain category. In 2007 Purdue Pharma was charged with misleading the public about the safety of its bestselling pain drug OxyContin and ordered to pay $634 million in fines, one of the largest government-imposed penalties on a pharma manufacturer at the time. Three executives pled guilty and were excluded from participating in federal healthcare programs for 15 years.


Opioids like OxyContin and fentanyl are the most commonly prescribed pain drugs. Sales increased by more than 175% between 1997 and 2006, according to a recent study. These drugs are also widely abused. Almost half of long-term users may be misusing the drugs and placing themselves at risk for overdose and death, research suggests.


Medication monitoring can be an important tool for healthcare professionals who prescribe opioids for chronic pain, especially as treatment sales escalate. Diagnostics makers and the labs that carry out testing stand to gain.


But reimbursement needs to be appropriate. According to James Langley, former SVP of reimbursement for Accredo Health Group and now a consultant, a pattern of improper reimbursement can prompt payers to enact rules designed to minimize over-utilization, threatening patients’ access.


Millennium promoted a document called “Gross Revenue by Insurance Category for Multi-Clin 11 Panel Test Kit” that claimed clinicians could gain revenue—as much as $2 million in a year—if they order between one and 20 urinary drug screens per day. The document suggests each physician can bill as many units as there are panels in the test kit, at least nine.


However, the reimbursement code suggested for use by doctors in the Millennium document—the CPT code 80101QW—is actually intended to be listed only once for an entire test kit. Results also must be confirmed by a second method. The lab’s clients used the code to bill federal and other insurance programs for “multiple units of 80101QW per patient per day,” the suit argues.


“It’s incumbent on any healthcare company to understand the site of service economics and to explain to and work with customers on things that can potentially impact practice revenue,” Langley said. What is potentially wrong is making that the primary marketing message. From the payer perspective, that can “run every risk of potentially driving an over-utilization of services for that test.”

Both the physicians and Millennium “knew or should have known that it would be fraudulent and abusive to bill government and private insurance programs nine (9) units for a test kit which can be purchased for less than $10; performs all tests in a single testing event; and takes less than five minutes to produce a qualitative result,” the plaintiff asserts, calling Millennium’s physician billing model a “cleverly thought out scheme which attracts physicians to the conspiracy by providing them with greater income than their typical salary.”


Between Purdue’s earlier misstep and now the Millennium case alleging the lab enticed doctors to use its medication monitoring services, other marketers in this chaotic category have some cautionary tales.


The case is USA et al v. Millennium Laboratories of California et al, 1:09-cv-12209-JLT, US District Court, District of Massachusetts.