March 31, 2022
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Nevada to Receive Up to $335,000
Carson City, NV —
Today, Nevada Attorney General Aaron D. Ford announced that Nevada has joined
with other states and the federal government to settle allegations of Medicaid
fraud involving MD Spine Solutions LLC, d/b/a MD Labs Inc. and its principal
owners Denis Grizelj and Matthew Rutledge. MD Labs, a California corporation
headquartered in Reno, operates a clinical laboratory specializing in urine
drug testing.
The settlement, which is based on MD
Labs’ financial circumstances over time, is guaranteed at a minimum of $11.6
million and could reach a maximum of $16 million. Of this amount, Nevada could
receive over $335,000.
“This settlement is yet another
example of how my office will not allow bad actors to game the Medicaid system
for personal gain,” said AG Ford. “I’m proud of the work our Medicaid
Fraud Control Unit put in on this settlement, and I hope this serves as an
example to bad actors going forward.”
The settlement resolves allegations
that from Jan. 1, 2015, through Dec. 31, 2019, MD Labs improperly billed, or
caused to be billed, federal health care programs for unnecessary urine drug
testing. This included both presumptive tests, a less expensive test that
quickly provides qualitative results, and confirmatory tests, a more expensive
test that is designed to confirm quantitatively the results of presumptive
tests.
MD Labs performed both tests at or
around the same time and then simultaneously reported the results to health
care providers. MD Labs, Grizelj and Rutledge knew that this rendered the
presumptive test results irrelevant for most health care providers. The
government alleges that MD Lab’s conduct violated the Federal False Claims Act
and the Nevada False Claims Act and resulted in the submission of false claims
to the Nevada Medicaid program.
This settlement results from a
whistleblower lawsuit originally filed in the United States District Court for
the District of Massachusetts. Although the matter was filed in Massachusetts,
the company in question, MD Labs Inc., is headquartered in Reno, Nevada.
A team from the National Association
of Medicaid Fraud Control Units (NAMFCU) participated in the settlement
negotiations on behalf of the states and included representatives from the
Offices of the Attorneys General for the states of Georgia, Massachusetts,
Nevada, New Mexico, Texas and Virginia.
The Nevada MFCU receives 75% of its
funding from the U.S. Department of Health and Human Services under a grant
award. The remaining 25% is funded by the State of Nevada. Persons convicted of
Medicaid fraud may also be administratively excluded from future Medicaid and
Medicare participation. Anyone wishing to report suspicions regarding any of
these concerns may contact the MFCU at 702-486-3420 or 775-684-1100.
NAMFCU regularly assigns national
teams to work on large, multi-state whistleblower lawsuits under the False
Claims Act (FCA). In this lawsuit,
NAMFCU handpicked Nevada Senior Deputy Attorney General Amy Steelman was
handpicked by NAMFCU to serve as team leader. This marked Steelman’s first time
as a team leader on a NAMFCU-assigned case. Steelman’s coordination among all
the states in putting together this settlement was a large part in obtaining
this successful settlement on behalf of Nevada and the other states that
participated in the settlement.
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