Credit: terovesalainen/Adobe Stock Allstate Qui Tam Action Can Proceed Against Clinical Laboratory Over 'Growing and Disturbing Trend' of Unnecessary Urine Drug Testing
"Allstate submits that, in recent years, the opioid abuse crisis has fueled urine drug testing (UDT) for pain management and prescription compliance, ripening opportunities for fraud, waste, and abuse," U.S. Chief District Judge Renée Marie Bumb wrote. "It links Phoenix Toxicology to a growing and disturbing trend of unnecessary UDT."
May 31, 2024 at 04:11 PM
5 minute read
In a qui tam action filed by Allstate Insurance, the court denied a clinical laboratory's motion to dismiss allegations that it submitted fraudulent claims for duplicative, excessive or medically unnecessary drug testing, finding that the insurer asserted just enough facts to meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b).
Allstate filed the action under the False Claims Act against Phoenix Toxicology and Lab Services in the U.S. District Court for the District of New Jersey. Phoenix is a clinical laboratory based in Arizona that Allstate alleged had engaged in a scheme to defraud the United States by performing and obtaining reimbursement for medically unnecessary urine drug testing (UDT), according to the opinion. The district court's opinion in United States ex rel. Allstate Insurance v. Phoenix Toxicology and Lab Services was issued on May 30.
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