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Clinical Laboratories Indicted for Medicaid Fraud and Illegal Kickbacks

July 5, 2022

A Massachusetts grand jury indicted four clinical laboratories for Medicaid fraud and paying illegal kickbacks.  The Massachusetts Attorney General also charged the laboratories’ owners, two marketing companies, and a physician in the Medicaid fraud scheme.  Urine testing is a common target of Medicaid fraud schemes.  As a result of this fraud, MassHealth allegedly paid over $2 million in false claims.

The press release by the Massachusetts Attorney General, shows the defendants are connected by a common individual, Vipin Adhlakha (“Adhlakha”).  Adhlakha owns three of the clinical laboratories, Alpha Labs, Aria Diagnostics, and Preferred Laboratory (collectively “Adhlakha Entities”).  The charges against Adhlakha include Medicaid False Claims Act violations, larceny, paying kickbacks, conspiracy and money laundering.  The other defendants also face similar charges.

Referrals to Clinical Laboratories in Exchange for Illegal Kickbacks

The first scheme involves kickbacks Adhlakha paid to marketing companies in violation of  Massachusetts law.  To increase the volume of urine tests referred to his laboratory, Adhlakha Entities promised the marketing companies a percentage of the resulting insurance reimbursements. The Massachusetts anti-kickback statute is modeled after the federal version and prohibits paying or receiving remuneration to generate government healthcare business.

Similarly, the indictment claims the Adhlakha Entities paid illegal kickbacks to Lab USA in exchange for referrals of urine samples.  As charged, the more urine tests the defendants generated, the more money they all made.  Whether the patients or their doctors wanted or needed the tests didn’t matter.

False Claims Submitted to Medicaid for Medically Unnecessary Tests

The second part of the fraud entailed claims submitted to MassHealth (the Massachusetts Medicaid program) for unnecessary residential monitoring testing. Routine urine drug testing, such as that done on residents at sober homes, is not “medically necessary.”  Therefore, it is not billable to Medicaid.  The  Adhalakha Entities allegedly conspired with a Massachusetts doctor to bill Medicaid for millions of dollars in routine monitoring testing.

How to Report the Violation of a State’s False Claims Act

We have assisted many whistleblowers in bringing cases under various state false claims acts.  For instance, the recovery of $4.5 million from CleanSlate to settle federal and state false claims act violations.  If you know of the violation of any state or federal false claims act, contact us for a free and confidential consultation.