Corporate Compliance

Quest agrees to California's largest false claims settlement

Compliance Monitor, May 25, 2011

Quest Diagnostics, California’s largest provider of medical laboratory testing, will pay $241 million to settle claims that it overcharged the state's Medicaid program, according to a California Attorney General press release. The settlement is the largest recovery in the history of California's False Claims Act.

Whistleblower Chris Riedel and his company Hunter Laboratories, a Quest competitor, filed suit against Quest in 2005 alleging that Quest systematically overcharged the Medi-Cal program for more than 15 years. Quest also allegedly provided illegal kickbacks to doctors, hospitals, and clinics in exchange for referrals. Quest offered them lab tests at a low price, then charged Medi-Cal a higher price to make up the difference, according to the press release.

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