Laboratory Corporation of America (Labcorp), a national clinical diagnostics company, has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting medically unnecessary claims for urine drug testing (UDT) to Medicare for payment. The settlement, announced on July 15, 2026, by the U.S. Attorney's Office for the District of Massachusetts, addresses conduct that occurred from January 1, 2018, through November 22, 2023.
The government alleged that Labcorp offered clients a testing panel called 'Toxassure Comprehensive,' which having both presumptive and definitive testing methods. Presumptive UDT detects the presence or absence of certain drug classes, while definitive UDT identifies individual substances and their concentrations. Medicare pays a flat rate for laboratory-based presumptive UDT, regardless of the number of drug classes tested, and a flat rate for 22 or more drug classes tested under the definitive method.
The Alleged Scheme
According to the government, Labcorp routinely submitted claims to Medicare for both presumptive and definitive UDT, some of which were submitted pursuant to the ToxAssure Comprehensive panel. The panel consisted of a preselected combination of presumptive UDT for certain substances and direct-to-definitive UDT (with no prior presumptive test) for other substances.
Labcorp ran many of these tests simultaneously for the same patient, on the same date of service, using the same urine sample, and billed Medicare with CPT code 80307 for the presumptive UDT and HCPCS code G0483 for the definitive UDT. In other words, Labcorp billed Medicare for both the all-inclusive presumptive code and the highest-tier definitive code each time it performed the ToxAssure Comprehensive panel. For several substances tested on a direct-to-definitive basis, a presumptive testing option existed, but Labcorp performed its definitive tests without first performing a presumptive test to determine the necessity of definitive testing for that substance.
Government Response and Settlement Terms
United States Attorney Leah B. Foley said: 'Today's settlement reflects my Office's enduring commitment to combatting healthcare fraud and recovering taxpayer money. Labcorp's conduct resulted in Medicare payouts for unnecessary tests. We will continue to hold accountable providers who engage in fraud, waste, and abuse.'
Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division added: 'The government expects that any testing it pays for is medically necessary and not wasteful or structured in a way that maximizes billing opportunities for providers at the expense of the federal fisc. We will continue to hold providers who do otherwise accountable.'
Acting Deputy Inspector General for Investigations Miranda L. Bennett of the HHS Office of Inspector General stated: 'Medicare beneficiaries and taxpayers should be able to trust that testing and billing practices are fair and appropriate. Today's settlement makes clear that when providers put profits before patients and ignore billing rules, we will act decisively to hold them accountable.'
As part of the settlement, Labcorp represented that it ceased billing the combination of CPT code 80307 and HCPCS code G0483 for UDT using the ToxAssure Comprehensive panel. The company has been credited in this settlement under the Department of Justice's guidelines for taking disclosure, cooperation and remediation into account.
