Two Drug Testing Companies to Pay Over $1.7 Million to Resolve False Claims Act Allegations

Blue Waters Assessment and Testing Services, LLC (“BATS”) and BioTap Medical (“BioTap”) have agreed to pay more than $1.7 million to settle False Claims Act allegations of improperly billing urine drug tests to Medicare and Kentucky Medicaid.

Blue Waters Assessment and Testing Services, LLC (“BATS”) allegedly conducted urine drug testing, which includes collecting samples from individuals who are mandated to undergo such tests.. The drug tests were then performed on the urine samples by BioTap, and its clinical laboratory VerraLab JA, LLC.

The False Claims Act (FCA) prohibits the submission of false claims for payment to the Federal government. Since Medicaid and Medicare only cover laboratory tests utilized for medical diagnoses or treatment purposes and not to satisfy court orders, BATS and BioTap were allegedly in direct violation of the FCA.

Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky stated, “The federal Medicaid and Medicare programs are designed – and funded – to provide health care benefits to eligible individuals with a medical necessity. These lab tests were not medically necessary and were improperly billed to these programs. It is important to all of us that steps are taken to return such misapplied funds to their appropriate purpose – providing medical care.”  Whistleblower attorney Jason T. Brown added, “Companies that play loose with the rules will eventually feel the tightening of the False Claims Act holding them accountable.”

As per the False Claims Act, a private individual, known as a relator, can file a qui tam lawsuit on behalf of the government, and if the suit is successful the whistleblower may be eligible to receive between 15% and 30% of the government’s total recovery as a whistleblower award. The two whistleblowers who initiated this case are entitled to receive $295,000 as whistleblower rewards.