Qwest Diagnostics, which has a national contract with Medicare and Medicaid, reportedly over charged the state of California more than $200 million for services not rendered. Reportedly, the state of California was overcharged for approximately 15 years. Medi-Cal, the state of California’s version of the nationalized Medicaid program, paid out hundreds of millions of dollars to Qwest Diagnostics.
According to court records, officials at Qwest Diagnostics solicited California doctors, hospitals and medical centers and paid them to refer patients to their labs for outpatient testing. Some of the tests ordered by affiliated physicians were later deemed medically unnecessary. Although the state has not announced any plans to prosecute any of the doctors or medical centers associated with Qwest Diagnostic’s fraudulent billing practices, some have lost their medical licenses.
California Attorney General Kamala Harris is happy with the results of the settlement. It is the largest settlement involving a state contracted medical center in California’s history. Harris believes that the ruling will send a strong message to health care company executives. As the number of fraudulent medical claims rise each year, investigators were startled when they discovered that many medical companies were directly involved.
Qwest Diagnostics is to pay the $214 million settlement to the state of California in the coming months. Because this case was settled out of court it is unlikely that Qwest Diagnostics will appeal. Several other major lab companies are currently under investigation by the state of California. LabCorp is expected to go to trial in 2012 to face similar charges.
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