National drug testing firm Averhealth agreed to pay $1.3 million to settle allegations, first brought by a whistleblower, that it knowingly submitted false claims to the Michigan Department of Health and Human Services (MDHHS), the Department of Justice (DOJ) announced.
Michigan’s Children’s Protective Services and Foster Care contracted with Averhealth, doing business in Michigan as Avertest, to drug test parents with a history of addiction, the DOJ said in a press release Thursday. The program was administered by the MDHHS and paid with a federal Social Service Block Grant, administered by the U.S. Department of Health and Human Services.
The case resolved claims brought under the qui tam provisions of the False Claims Act by Sarah Riley, a physician. She will receive nearly $229,000 of the settlement total.
The details: From May 2019 to November 2020, Averhealth didn’t conform to the terms of its contract and didn’t conduct follow up tests to confirm results showing the presence of illegal drugs, the DOJ alleged.
“Averhealth failed to meet its commitments to MDHHS yet continued to claim entitlement to payment for its nonconforming services,” said U.S. Attorney Dawn Ison in the release. “This outcome highlights our office’s continued commitment to hold accountable any business or person who is dishonest in their dealings with programs funded by the federal government.”
Company response: In an emailed statement, the company said, “This was a small part of Averhealth’s business that concluded several years ago. As the agreement with the United States Attorney’s Office makes clear, Averhealth strongly disagrees with the allegations. We believe we fully performed under the contract and provided services of the highest quality, including accurate test results. Like many companies in this position, Averhealth settled this matter in order to avoid the costs and distraction of litigation.”
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