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Attorney General Josh Stein Announces $49 Million Medicaid Fraud Settlement with Progenity

For Immediate Release:
Tuesday, July 28, 2020

Contact:
Laura Brewer (919) 716-6484

(RALEIGH) Attorney General Josh Stein today announced a $49 million multistate settlement and an agreement in principle with biotechnology company Progenity Inc., to resolve allegations that the company fraudulently billed federal health care programs for prenatal tests and provided kickbacks to physicians to encourage them to order Progenity tests for their patients. North Carolina will receive $50,292.24 of the settlement to resolve claims relating specifically to North Carolina’s Medicaid program.

“Health care providers should make decisions about their patients’ care by relying on medically sound information, not because they were influenced by companies looking to maximize their own profit,” said Attorney General Josh Stein. “My office will continue to hold companies responsible for committing fraud and wasting taxpayer resources.”

Progenity makes extensive admissions regarding the company’s conduct with respect to both the fraudulent billing and kickback claims. The settlement resolves allegations that Progenity overbilled Medicaid to seek reimbursement for noninvasive prenatal tests that screen for genetic disorders and abnormalities, using a billing code that misrepresented the tests provided. The settlement also resolves allegations that Progenity provided illegal kickbacks by:

  • Providing excessive “draw fees” that exceeded fair market value for blood specimens collected for Progenity tests.
  • Providing meals and happy hours for physicians and their staff that often involved little or no educational content.
  • Improperly reducing or waiving patient coinsurance and deductible payments.

The settlement arises in part from a private whistleblower lawsuit. A National Association of Medicaid Fraud Control Units team participated in the investigation and the settlement negotiations with Progenity on behalf of the states. The North Carolina settlement agreement was reached by the Medicaid Investigations Division of the North Carolina Department of Justice and the North Carolina Division of Health Benefits.

About the Medicaid Investigations Division (MID)

The Attorney General’s MID investigates fraud and abuse by health care companies and providers, as well as patient abuse and neglect in facilities that are funded by Medicaid. Medicaid is a joint federal-state program that helps provide medical care for people with limited income. To date, the MID has recovered more than $850 million in restitution and penalties for North Carolina.

The MID receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,160,252 for Federal fiscal year (FY) 2020. The remaining 25 percent, totaling $2,053,414 for FY 2020, is funded by the State of North Carolina.

To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

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