Attorneys General reach settlements with PTL

By Shaun Moriarty
Citizen Chronicle Writer
shaun@thecitizenchronicle.com

SOUTHBRIDGE — Unnecessary urine drug screens have resulted in large settlements between a local clinical laboratory and the Attorney General’s offices of two states.

Precision Testing Laboratories, Inc. (PTL), located at 79 North Street, and president/owner David Fromm, of Hull, will forfeit more than $1 million as part of settlements with both the Connecticut Attorney General’s Office and Massachusetts Attorney General’s Office. More than $400,000 will be paid to resolve claims it billed the state’s Medicaid program, known as MassHealth, for medically unnecessary urine drug screens, according to a press release from Massachusetts Attorney General Maura Healey. The payment is pursuant to a settlement agreement with Healey’s office. Additionally, PTL and Fromm are suspended from participation in MassHealth for 10 years. Neither is currently doing business as a health care provider in Massachusetts. Similar consequences have been agreed to in Connecticut, including a 10-year suspension in that state’s Medicaid program. Connecticut will collect $656,912 as part of the settlement.

“Medicaid fraud schemes cheat taxpayers and take critical health care resources away from the people that need them most,” Healey said in a press release. “We will go after cases of fraud and return the funds to the state.”

According to Connecticut Attorney General George Jepsen’s office, PTL was enrolled as a licensed clinical laboratory in the Connecticut Medical Assistance Program (CMAP), which includes the state’s Medicaid program.

Healey’s office began an investigation after the matter was referred by MassHealth. The investigation by the Massachusetts Attorney General’s Medicaid Fraud Division concluded that PTL billed MassHealth for expensive, quantitative urine drug tests as a routine and medically unnecessary supplement to less expensive, qualitative urine drug screens.

According to her office, the Massachusetts Attorney General’s investigation also found that PTL aggressively marketed an expensive and unnecessarily complex drug testing package to sober houses, despite the fact that they knew that the tests were for residential sobriety monitoring, a violation of MassHealth regulations.

Jepsen’s office made similar allegations, noting that PTL marketed itself to residential drug treatment facilities and sober homes despite knowing the facilities and homes did not provide a physician-managed drug treatment and that the need for drug testing at those facilities and homes was limited to ensuring sobriety as a condition of residency. Jepsen asserted a less expensive drug test result would have sufficed.

PTL’s website describes itself as being “committed to serving those in recovery and those who help them” by providing clinical laboratory testing for those recovering from alcoholism and drug addiction whose physicians have ordered testing as part of their treatment plan. Furthermore, the company claims to “test for a wide range of drugs including alcohol and also for several adulterants commonly used to attempt to defeat the tests.”

Jepsen’s office alleged PTL’s sales pitch to residential drug treatment facilities and sober homes it offered free on-site specimen collection and fast online results, but also emphasized that all of its testing and services would be done at no cost to the facilities and homes; instead, PTL would simply bill their residents’ insurance, the vast majority of whom received coverage through the CMAP.

Connecticut further alleged PTL submitted false claims to CMAP for expensive drug tests that were not medically necessary because the tests were not part of a physician’s drug treatment program, not specifically tailored to address each individual’s particular medical condition, and much more costly than alternative less costly drug testing.

“Enforcement of the False Claims Act and protection of our taxpayer-funded healthcare programs continues to be a priority of my office,” said Jepsen. “Medical necessity is an important distinction in Medicaid provider agreements, and we alleged that this provider knew that it was violating its provider agreement in billing Medicaid for these expensive tests, yet did so regardless. This provider diverted taxpayer funded monies intended to help address drug and alcohol abuse treatment into his own pocket.  My office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the state’s Medicaid program.”

Connecticut Department of Social Services (DSS) Commissioner Roderick L. Bremby said, “While outliers like this laboratory do not represent Medicaid providers as a whole, this enforcement action clearly underscores the fact that strong anti-fraud measures are needed to protect the integrity of public health coverage programs.  As administering agency for Medicaid, DSS thanks and commends Attorney General Jepsen and his staff, the Massachusetts Attorney General’s Office, our own investigators, and other state and federal partners for outstanding work in rooting out fraud and abuse.”

Healey’s office said it has established itself “nationally as a leader in the fight against fraud, waste and abuse in the Medicaid program. The office’s Medicaid Fraud Division works to prevent and prosecute provider fraud and violations of state law pertaining to the administration of the Medicaid Program. The division often works collaboratively with other enforcement authorities in other states, as well as with federal enforcement authorities.”

In 2017, the Division recovered more than $45 million for the state’s Medicaid program and prioritized cases involving providers who contribute to the opioid epidemic by illegally prescribing or dispensing pills, as well as focused on combating fraud, waste and abuse in the home health industry.

PTL is not unfamiliar to state authorities in relation to MassHealth issues. In 2013, State Auditor Suzanne M. Bump said PTL owed $3.5 million after an audit of MassHealth discovered more than $13.6 million in unnecessary expenses and improper billing of costs of drug testing for those treated for substance abuse, according to a contemporary press release.

In Massachusetts, the matter was handled by Assistant Attorney General Kevin Lownds, Investigations Supervisors Joseph Shea and Lisa Bailey, and Investigators Steven Pfister and Erica Schlain, all of the Attorney General’s Medicaid Fraud Division, with assistance from MassHealth. In Connecticut, Legal Investigator Thomas Martin and Assistant Attorneys General Joshua Jackson and Michael Cole, chief of the Antitrust and Government Program Fraud Department, assisted the Attorney General with this matter.

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