Medical Lab Settles with Feds, West Virginia Mine Workers Local for $1.2M+

Benefit fraud has become an enormous form of theft from labor unions. Add one more case to the list. On October 23, federal prosecutors announced a settlement with a Michigan-based company, Great Lakes Medical Laboratory, Inc., for a little over $1.2 million, a sum representing twice the company’s combined fraudulent billings of the Medicare program and a United Mine Workers of America-affiliated benefit plan in West Virginia. “This settlement demonstrates my office’s commitment to protect critical Medicare dollars and union-affiliated benefit plans from fraud and abuse,” said U.S. Attorney Mike Stuart. The action follows a joint probe by the Office of Inspector General of each of the Labor Department and the Health & Human Services Department, plus the U.S. Attorney’s Healthcare Fraud Abuse, Recovery and Response Team (ARREST).

If there has been a state hit harder by opioid drug crisis than West Virginia, it would be hard to name it. That’s why the U.S. Attorney’s Office for the Southern District of West Virginia established the ARREST program in February 2019, which, among other things, investigates health care scams. Among recent scam targets were certain health plans sponsored by the United Mine Workers of America. These plans were made possible by federal legislation enacted in 1992 known as the Coal Industry Retiree Health Benefit Act. A Farmington Hills, Mich.-based lab analysis firm, Great Lakes Medical Laboratory, Inc., was the culprit.

According to prosecutors, during the period of January 4, 2016-May 12, 2017 (or thereabouts), Great Lakes presented at least 21,732 claims to Medicare and the Mine Workers fund for reimbursements of already reimbursed lab analyses of urine and blood test samples. Investigators concluded that the claims were for services that had not been ordered by the referring physician, and moreover, lacked documentation. The false or misleading claims by Great Lakes resulted in combined losses to Medicare and the union of $600.368.82. The $1,200,737.64 out-of-court settlement represents twice that figure. As part of the agreement, Great Lakes entered into a three-year monitoring program to be managed by the Office of Inspector General of the U.S. Department of Health and Human Services.