Lab testing provider settles with state of California following recovery audit

Medical laboratory testing provider Quest Diagnostics recently reached a $241 million settlement with the state of California after an independent, statewide recovery audit found that it had violated the state's False Claims Act by failing to abide by comparable change regulations. As a result, California's Medicaid program, Medi-Cal, had overpaid for lab testing services.

The state's attention was initially drawn to the case by whistleblower Hunter Laboratories, which claimed that its ability to compete in the marketplace was being compromised by the low rates being offered to healthcare providers by Quest.

"In a time of shrinking budgets, this historic settlement affirms that Medi-Cal exists to help the state's most vulnerable families rather than to illicitly stoke corporate profits," said California Attorney General Kamala D. Harris in a statement. "Medi-Cal providers and others who seek to cheat the state through false claims and illegal kickbacks should know that my office is watching and will prosecute."

Statutory guidelines require Quest to compensate the whistleblower. The company will also have to reimburse the state's Medi-Cal program and the attorney general for expenses related to prosecution and investigation. 

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