Labcorp Agrees to Pay $2,100,000 to Settle False Claims Act Allegations Related to Overbillings on Department of Defense Contracts

The civil settlement was announced by United States Attorney for the District of Maryland Erek L. Barron, Special Agent in Charge of the Defense Criminal Investigative Services, Mid-Atlantic Field Office, Christopher W. Dillard, and Special Agent in Charge of the Department of the Army Criminal Investigation Division’s Major Procurement Fraud Field Office, L. Scott Moreland.

“Federal contractors are required to bill for costs actually incurred.  The U.S. Attorney’s Office and our partners are committed to protecting taxpayer dollars and ensuring integrity and compliance with government contracts,” said U.S. Attorney Erek L. Barron. “This settlement demonstrates DCIS’ vigorous commitment to investigate false claims related to DoD contracts. The submission of truthful and accurate documentation for payment by health care entities is essential to the integrity of DoD contracts,” said Special Agent in Charge Christopher W. Dillard, DCIS Mid-Atlantic Field Office. “DCIS proudly stands with our investigative law enforcement partners and with the support of the Defense Health Agency to root out fraud, waste and abuse.”

“We are very pleased with today’s announcement,” said Special Agent-in-Charge L. Scott Moreland of the Department of the Army Criminal Investigation Division’s Major Procurement Fraud Field Office. “This is a true testament to our continued commitment to work closely and seamlessly with our outstanding fellow law enforcement agencies to protect the financial interests of the United States Army and the United States Government as a whole.”

In 2012, LabCorp entered a contract with DoD to perform laboratory testing at all DoD Military Treatment Facilities throughout the world.  Certain specialized tests performed on the DoD contract, including genetic tests involving fetuses and parents, were performed by GeneDx as a reference lab for Labcorp.  GeneDx would invoice Labcorp for these genetic tests and Labcorp would in turn invoice DoD.  According to the settlement agreement, from December 1, 2013 through June 30, 2021, LabCorp double and/or triple billed DoD for genetic tests performed by GeneDx; overcharged DoD for genetic tests performed by GeneDx; and inappropriately billed DoD for tests performed by GeneDx when LabCorp could not later locate evidence of a (i) DoD requisition form, (ii) GeneDx test result, and/or (iii) corresponding GeneDx invoice.

The civil settlement resolves a lawsuit filed by Donna Hecker-Gross, a former employee of Labcorp, under the whistleblower provision of the False Claims Act.  The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The civil lawsuit is captioned United States ex rel Donna Hecker-Gross v. Laboratory Corporation of America, Inc. PX 18-3459 (D. Md).  As part of the settlement, the Ms. Hecker-Gross will receive $357,000.

The claims resolved by this settlement are allegations.  The settlement is not an admission of liability by LabCorp nor a concession by the United States that its claims are not well-founded.