The contract between Sutter Health and insurer Anthem Blue Cross is set to expire Jan. 1.
Sutter Health has agreed to pay more than $13 million to settle allegations it violated the U.S. False Claims Act by billing the federal government for toxicology screening tests performed by outside labs.
Federal law enforcement officials from various agencies announced the deal with the Sacramento-based health care provider Monday in San Francisco.
“Sutter Health agreed to pay $13 million to settle allegations that it billed government health programs for lab tests performed by others,” said U.S. Attorney Stephanie M. Hinds, in a statement. “Government health care programs must be protected, and this office will investigate and pursue health care providers that fail to provide the services paid for by public health care programs.”
Federal authorities said the civil settlement agreement is “neither an admission of liability by Sutter Health nor a concession by the United States that its claims are not well founded.”
Sutter Health didn’t immediately return a request for comment.
The government contends in a civil settlement agreement signed by Sutter Health that under the terms of a contract between Sutter Health hospital Alta Bates Summit Medical Center and Navigant Network Alliance, LLC, Navigant referred urine toxicology specimens obtained from physicians and laboratories across the country to Sutter.
Sutter allegedly submitted bills, or caused bills to be submitted, for reimbursement of the qualitative and quantitative testing it performed on the specimens.
Federal officials say Sutter didn’t perform the quantitative testing on thousands of specimens referred to under the agreement, and the tests were instead performed by third-party labs. The government says Sutter nevertheless sought reimbursement for the tests.
In the settlement agreement, the government says between Aug. 1, 2016, and June 30, 2017, Sutter billed for urine toxicology tests it didn’t perform, yet was paid for the testing by the Federal Employees Health Benefits Program, Medicare, Medicaid, and Tricare.
Of the $13,091,452 Sutter has agreed to pay, the health care provider has already paid more than $6.5 million to the U.S. government. Sutter has agreed to pay the remaining amount within 30 days.
The agreement is a result of a joint investigation between the U.S. Attorney’s Office for the Northern District of California, the FBI and other government agencies.
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