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Insight and commentary on qui tam law in Oregon

More Urine Trouble

Lexington lab to pay $10M for performing medically unnecessary urine tests.
March 5, 2024

This is not the first time we’ve commented on fraudulent urine tests. This scheme is a little different from the last time though. This time, the lab was actually doing the tests. It wasn’t the doing the tests that was the problem. No, this time the problem is that the tests were not necessary.

There are a variety of situations that require urine tests. Sometimes you need a urine test for medical reasons. For example, if you have or suspect kidney disease, a doctor may order a urine test to diagnose you. On the other hand, there are times when you might need a urine test for reasons that are entirely independent of your medical condition. If you’re in recovery, for example, you might need to test urine to enforce accountability in the recovery journey. There’s a key difference here: Medicare and Medicaid will pay for urine tests that have a medical purpose. They will not pay for urine tests to aid in accountability for your recovery. It’s not that it’s not a worthy cause…it’s just not medically necessary.

The scheme: The scheme here was fairly simple. A Lexington toxicology lab, LabTox, LLC, its owner, Ronald Coburn, 76, and its compliance officer, Erica Baker, 31 recruited a company called Blue Waters Assessment and Testing Services to refer court-ordered urine drug tests to LabTox. They knew this was not medical testing, but caused LabTox to bill the tests to Medicare and Kentucky Medicaid anyway. In addition, they solicited urine drug tests from substance abuse recovery programs that did not provide medical treatment—typically faith-based residential programs or homeless shelters.  They knew that the tests were not for any medically required reason and misled the sober home directors by putting facility staff on LabTox’s payroll and compensating them based on the number of urine drug tests sent to the lab. Kickbacks + medically unnecessary treatments. Double whammy.

The penalty: The civil judgments will total over $10 million.

The whistleblower: Remains anonymous, saves the government millions, and will collect a handsome reward, up to 25% of the total recovered.

If you would like to report health care fraud , you can contact attorneys at Markowitz Herbold PC. Vivek Kothari is a former federal prosecutor who represents whistleblowers under the False Claims Act. For a free consultation, you can contact Vivek at 503-274-7425 or