Medical Lab to Pay $8 Million in Fraud Case

Metpath Inc., one of the nation’s biggest medical testing laboratories, has agreed to pay $8.6 million to settle charges that it defrauded the government. The whistle-blower in the case will receive a $1.29-million share.

The Teterboro, N.J., company was accused of billing Medicaid and Medicare for tests it didn’t perform. The amount of money at issue was not disclosed.

Under the settlement with the Justice Department, announced Wednesday, Metpath admitted no wrongdoing.

The lawsuit was originally filed by Terry Fletcher, a sales service representative at Metpath’s Rockville, Md., lab who was fired in 1993. She claimed that Metpath routinely billed the government for tests it wasn’t able to perform because the blood or tissue sample had been lost or contaminated. Fletcher claimed she was fired for investigating the billing.

The U.S. False Claims Act, or whistle-blower statute, allows private citizens who claim to know of fraud against the government to sue. The Justice Department can intervene in the case if it finds the claim has merit.

Under the Civil War-era law, those filing suit can receive up to 25% of any damages awarded the government.

In a statement, Corning Life Sciences Inc., Metpath’s parent, blamed a “lack of complete integration” in the billing and testing departments. It said the problem occurred in no more than a fraction of 1% of the 70 million tests performed yearly by Metpath.