Health Law Daily Wrap Up, FALSE CLAIMS ACT—SETTLEMENT AGREEMENTS: Labcorp to pay $14.5M to resolve FCA allegations over urine drug testing, (Jul 22, 2026)

By Patricia K. Ruiz, J.D.

The company accepted responsibility for specified conduct tied to its ToxAssure Comprehensive panel.

Laboratory Corporation of America Holdings (Labcorp) has agreed to pay $14.5 million to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare Part B for medically unnecessary urine drug testing associated with its ToxAssure Comprehensive testing panel. Under the settlement, Labcorp admitted, acknowledged and accepted responsibility for certain conduct related to its billing practices from 2018 through 2023, while the United States alleged that the testing panel resulted in medically unnecessary claims for some Medicare beneficiaries. The settlement resolves civil claims related to the conduct and includes restitution and interest payments, according to the Justice Department and the settlement agreement (Settlement Agreement (July 6, 2026)).

Allegations. According to the settlement agreement, Medicare payment for urine drug testing during the relevant period was based on bundled payment rates associated with Current Procedure Terminology and Healthcare Common Procedure Coding System codes. For laboratory-based presumptive testing, Medicare paid a flat rate under CPT code 80307 regardless of the number of drug classes tested. For definitive testing, Medicare paid bundled rates that increased with the number of drug classes tested, with HCPCS code G0483 covering testing for 22 or more drug classes and carrying the highest bundled payment rate.

As part of the settlement, Labcorp admitted, acknowledged and accepted responsibility for specified facts concerning its billing practices between Jan. 1, 2018, and Nov. 22, 2023. During that period, the company routinely submitted claims to Medicare for presumptive and definitive urine drug testing, including testing performed through ToxAssure Comprehensive. The panel consisted of a preselected combination of presumptive testing for certain substances and direct-to-definitive testing for other substances without a prior presumptive test.

The settlement states that Labcorp performed many of those tests simultaneously for the same patient, on the same date of service and using the same urine sample. Labcorp then billed Medicare under CPT code 80307 for presumptive testing and HCPCS code G0483 for definitive testing. The agreement states that the company billed Medicare for both the all-inclusive presumptive code and the highest-tier definitive code each time ToxAssure Comprehensive was performed.

Labcorp further admitted that, for several substances tested on a direct-to-definitive basis, a presumptive testing option existed but definitive testing was performed without first conducting a presumptive test to inform the necessity of definitive testing for that substance. The United States alleged that billing for the full ToxAssure Comprehensive panel in that manner resulted in the submission of medically unnecessary claims to Medicare for some patients.

Settlement terms. The settlement agreement requires Labcorp to pay $14.5 million plus interest accruing at 4.5 percent annually beginning May 14, 2025. Of the settlement amount, $8.286 million is designated as restitution. In exchange, and subject to specified reservations, the United States agreed to release Labcorp and related entities from certain civil and administrative monetary claims arising from the covered conduct, including claims under the False Claims Act, the Civil Monetary Penalties Law and the Program Fraud Civil Remedies Act.

The agreement also states that Labcorp has ceased billing Medicare using the combination of codes G0483 and 80307 for beneficiaries tested through the ToxAssure Comprehensive panel. The Justice Department said the company received credit under department guidelines for disclosure, cooperation and remediation efforts in False Claims Act matters.

Companies: Laboratory Corporation of America Holdings (Labcorp)

CIAsSettlementAgreements: SettlementAgreementsNews FCANews FraudNews PartBNews ProgramIntegrityNews ProviderNews