Carolinas Healthcare System agrees to pay $6.5 million to settle upcoding allegations

Carolinas Healthcare System (CHS) agreed to pay $6.5 million to settle allegations of a years-long practice of upcoding urine drug tests, the Office of Inspector General (OIG) announced June 30.

According to court documents cited by the OIG, CHS submitted claims using HCPCS code G0431 (drug screen, qualitative; multiple drug classes by high complexity test method, per patient encounter) for drug screens that were only of moderate complexity and therefore should have been reported under code G0434 (drug screen, other than chromatographic; any number of drug classes, by CLIA waived test or moderate complexity test, per patient encounter). The OIG noted that code G0434 triggers a payment of approximately $20 and said that by using code G0431, CHS received approximately $80 more per test from federal health care programs.

The court documents claim this practice took place from 2011 to 2015. HCPCS codes G0431 and G0434 were deleted from the code set as of January 1, 2016, and were replaced by three presumptive drug testing G codes and four definitive drug testing G codes. 

The allegations against CHS came from whistleblower and former CHS laboratory director Mark McGuire under the qui tam provisions of the False Claims Act. Qui tam allows people with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the federal government. The whistleblower can then share in any recovery as a result of action against the wrongdoer. McGuire will receive $1.365 million from the settlement in this case.

The CHS case comes just over 10 days after separate actions resulted in settlements from two Massachusetts hospitals suspected of upcoding evaluation and management visits.