Attorney General's News Release

May 20, 1997

Nixon obtains $198,000 for Missouri Medicaid program from national clinical lab in settlement involving 44 states

Jefferson City, Mo. — Attorney General Jay Nixon announced today that Missouri has received $198,011 in restitution and penalties for the state Medicaid program from LabCorp of America Inc., one of the largest clinical laboratories in the country.

The Attorney General's Medicaid Fraud Control Unit joined 43 other states and the federal government in a national "Labscam" probe that netted more than $20 million for state Medicaid programs from the LabCorp investigation. The payment to the states was part of a $187 million settlement with the federal government to resolve claims that LabCorp and its three predecessor companies defrauded federal government health insurance programs through overbilling practices.

"Our aggressive pursuit of Medicaid fraud shows Missouri has a cop on the street to protect the public from these white collar crimes, which cost taxpayers millions of dollars each year," Nixon said.

LabCorp and the three predecessor laboratories were accused of defrauding state and federal Medicaid and Medicare programs by combining exotic laboratory tests with certain commonly ordered blood tests, thereby causing doctors to order tests that were not medically necessary. State and federal enforcement agencies contended that LabCorp marketed, sold, priced and billed tests in such a way that physicians were led to believe that the added tests did not increase the amounts billed to the government programs.

The predecessor laboratories to LabCorp of America were Roche Biomedical Laboratories Inc., National Health Laboratories Inc. and Allied Clinical Laboratories.

The LabCorp case is one of a number of clinical laboratory settlements which recovered nearly $800 million in connection with Labscam. Previous settlements include SmithKline Beecham Clinical Laboratories ($325 million), Corning/Damon ($119 million), National Health Laboratories ($111 million) and Corning/Metpath ($39 million).

Nixon established the Medicaid Fraud Control Unit within the Attorney General's Office in 1994 to investigate fraudulent and unscrupulous activities that cost Missouri taxpayers millions each year. To date, the program has recovered more than $11.9 million.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818