The least you need to know about recent drug testing scrutiny | Behavioral Healthcare Executive Skip to content Skip to navigation

The least you need to know about recent drug testing scrutiny

October 30, 2015
by Julie Miller, Editor in Chief
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Several recent actions surrounding urine drug testing have the treatment community on edge. Let’s break down the issue and finish up with some advice.

What’s the crux of the problem?

It’s all about fraud. Payers are concerned about overutilized drug testing as an unchecked revenue source. It’s hard to pin down where testing—which is clinically beneficial—becomes more of a profit stream.

Who is suing whom?

For one, mega-insurer Cigna is suing Sky Toxicology and its associated labs for $20 million in federal court. Allegedly, the labs paid dividends to treatment centers as kickbacks for increased testing, and patients were also forgiven their copay responsibility. According to Cigna, the insurer has paid out $32.7 million in drug testing claims to the labs since 2011.

Additionally, Millennium Health, a lab company, agreed earlier this month to a $256 million False Claims Act settlement with the federal government.

According to the Department of Justice’s assessment, Millennium misrepresented the necessity of certain tests and encouraged clinicians to use its “custom profiles,” which included a default panel of tests for each specimen. According to litigators, Millennium billed federal and state governments for testing in situations where the referrals for the testing came in exchange for free supplies.

While Millennium debates some of the merits of the allegations, officials say they respect the government’s role in oversight and enforcement. “Millennium Health is currently a very different organization than we were in the past. We fully embrace our obligation to both commercial and publicly funded health plans to provide value to the healthcare system overall and ensure that doctors who order our testing solutions adequately demonstrate that those solutions are clinically necessary, and aligned with the latest available clinical guidelines.,” said CEO Brock Hardaway in a statement.

What are the risks for treatment centers?

There are two distinct fraud issues related to drug testing practices: non-medically necessary testing; and kickbacks, according to Harry Nelson, founding partner at Nelson Hardiman LLP in Los Angeles.

“We encounter many drug rehabs where the tests are ordered independent of the doctor, where the testing continues at a high frequency that doesn’t get adjusted based on outcomes— for example, where it would make sense to gradually extend the intervals between testing based on demonstrated compliance—and where there are no records to demonstrate that the doctor ever read the results, let alone that he or she commented or acted based upon the results,” Nelson tells Behavioral Healthcare in an email. “All of these issues raise the specter of payers treating the tests as fraudulent and abusive.”

What about centers that have their own labs?

In addition to False Claims Act scrutiny, providers of all types will increasingly see investigations related to the Stark Law.



Julie Miller

Editor in Chief

Julie Miller


Julie Miller has more than 14 years of experience observing, analyzing and reporting on various...

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