New Jersey lab ordered to repay $3.3M to Medicaid

A medical lab in New Jersey has been ordered to repay $3.3 million to the state's Medicaid program. This decision follows an audit that found improper billing practices. The audit revealed that Star Laboratory in Piscataway charged for drug tests without getting the necessary signatures from healthcare providers. According to officials, Star Laboratory used printed labels on testing orders, which is against New Jersey regulations. These rules are designed to prevent fraud and abuse in the medical industry. State Comptroller Kevin Walsh emphasized that using a printed label violates the law and can lead to unnecessary tests and increased costs. Star Laboratory has defended itself against these claims. The lab's lawyers argue that the state's Medicaid Fraud Division is targeting a small company unfairly. They believe the regulation requiring a physician's signature is not enforceable and that the state itself does not always meet these standards. The Medicaid Fraud Division reviewed 296 claims filed by Star Laboratory from July 2017 to March 2021. They found that 54% of the claims lacked proper signatures. Additionally, the lab billed for more expensive tests than what was ordered in five cases. Star Laboratory's attorneys claimed that any errors in billing were simply human mistakes. Moreover, the review showed that in 34% of the cases, Star Laboratory failed to perform some of the specific tests that were requested. The State Comptroller's office is not seeking payment for these missed tests but noted they could have affected patient care. Star Laboratory must also create a plan to address the issues identified in the audit, alongside paying the financial penalty.