Ethos Laboratories Agrees to Pay $6.5 Million to Resolve Allegations of Fraudulent Billing

BOSTON - A Kentucky-based laboratory, Ethos Laboratories (Ethos), has agreed to pay $6.5 million to resolve allegations that it submitted false claims for payment to Medicare for urine drug testing (UDT) and for its proprietary test for chronic pain, known as the Foundation Pain Index (FPI).

According to the settlement agreement, Ethos admits that between Jan. 1, 2017 and July 15, 2024, Ethos submitted multiple claims for UDT for the same patient, on the same date of service, using the same urine sample. Ethos performed presumptive UDT via a relatively inexpensive test that could quickly yield qualitative results. It also performed definitive UDT via a more complex and expensive method that provided a quantitative result. Ethos performed and billed Medicare for both presumptive and definitive UDT for the same substance regardless of the results of the presumptive UDT and without determining that definitive UDT was necessary. Further, Ethos at times submitted claims for testing done pursuant to blanket UDT orders that were the same for all patients from a particular provider's practice, without obtaining any individualized determination of medical necessity by the ordering provider. In some instances, these blanket orders included substances with positivity rates below 0.01%.

In addition, per the settlement agreement, Ethos admits that between Nov. 12, 2020, and Oct. 6, 2023, it submitted claims for FPI testing for patients in a provider's practice without any individualized determination of medical necessity by the ordering provider, and, in some cases, without the provider's knowledge that Ethos was performing FPI testing. Ethos also submitted claims for FPI testing at high frequencies, including testing some patients multiple times in the same month.

On July 18, 2023, based on information provided by the Department of Justice, Medicare suspended Ethos's receipt of Medicare payments. Pursuant to that payment suspension, Medicare retained more than $6.5 million of billed claims from Ethos. As part of the settlement agreement, Ethos has agreed to forfeit the $6.5 million to satisfy this settlement. The settlement was reached after the government's review of Ethos's financial disclosures concerning its financial condition. In connection with the settlement, Ethos also entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.

Acting United States Attorney Joshua S. Levy; Roberto Coviello, Special Agent in Charge of the Department of Health & Human Services, Office of the Inspector General; and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistant U.S. Attorney Abraham R. George, Chief of the Civil Division handled the matter.