Medi-Cal investigation of inflated bills yields settlement from Lab Corp.

Meanwhile, federal investigators look into suspicious sales of prostheses, and S.D. whistle blower earns reward from federal government.

Modern Healthcare: Lab Corp. To Pay $49.5 Million To Settle Kickback Case
Laboratory Corp. of America has agreed to pay $49.5 million to resolve a whistle-blower's allegations that the Burlington, N.C.-based company paid kickbacks to doctors and hospitals for referring California Medicaid patients, whose bills were then allegedly inflated. The announcement brings the state's tally of settlements to more than $290 million and counting in its ongoing investigation into whistle-blower complaints against companies accused of inflating bills to Medi-Cal, California's Medicaid program. State law says companies must offer Medi-Cal comparable rates to similar payers (Carlson, 8/31).

(Minneapolis-St. Paul, Minn.) Star Tribune: Patients Flimflammed Out Of Their Prostheses?
The manager of prosthetic devices at the University of Minnesota Medical Center has been suspended with pay pending a federal investigation into whether he defrauded patients by convincing them to replace high-quality artificial limbs and parts and then selling their discards on eBay. Court documents unsealed this week show federal agents recently searched the Coon Rapids home of Peter Stasica Jr., 50, who has been employed by the hospital's owner, Fairview Health Services, since 1994. They seized computer equipment, financial records and several prosthetic devices, including a lower leg, an arm and a knee (Browning, 8/31).

Sioux Falls Argus Leader: Catholic Family Services Pays Up After Whistle Blows
A counselor who blew the whistle on Catholic Family Services over Medicare and Medicaid billing errors will receive $15,000 under a settlement agreement. The Catholic Diocese of Sioux Falls' counseling program admitted no wrongdoing in the case but agreed to forfeit $90,000 to the U.S. government, which in turn will give $15,000 to Diane Cogley of Sioux Falls. Cogley was working in Mitchell as a CFS counselor in June 2009 when she uncovered evidence of false billing claims. According to her complaint, CFS routinely would put Cogley's name on reimbursement claims for services actually provided by other counselors who didn't hold the same credentials and would not have been eligible for Medicaid and Medicare payments (Verges, 9/1).