Covid Test DMV LLC, operating as Rapid Health, a pharmacy based in Los Angeles, has agreed to pay $8,242,860 to resolve allegations that it violated the False Claims Act (FCA) by submitting false claims to Medicare for over-the-counter (OTC) COVID-19 tests that were never provided to beneficiaries.
Between April 2022 and May 2023, Rapid Health participated in the Centers for Medicare & Medicaid Services (CMS) OTC COVID-19 Test Demonstration Project. This program allowed Medicare Part B beneficiaries to receive reimbursement for up to eight OTC COVID-19 tests per month, at a fixed rate of $12 per test, by ordering from participating providers. Rapid Health distributed tests as part of this initiative, but the U.S. government alleged that the company knowingly submitted claims for tests that were ordered but never shipped to beneficiaries.
According to the government, Rapid Health’s internal processing issues led to situations where tests were billed to Medicare without being shipped. Despite being aware of these errors, Rapid Health continued to bill Medicare for the unshipped tests.
“The Demonstration Project was designed to increase the availability of OTC COVID-19 tests to Medicare beneficiaries in an unprecedented time of need,” said Brian M. Boynton, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “Providers that knowingly billed for tests that were never given to patients defrauded the American taxpayers and failed to support the goals of the project.”
The settlement resolves allegations that Rapid Health misused the program, continuing to bill for tests that were never delivered, and underscores the government’s commitment to preventing fraud in federally funded health care programs.
“We will continue to aggressively pursue individuals and companies that attempt to exploit Medicare for financial gain,” said Maureen Dixon, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS-OIG).
This resolution was part of a coordinated effort between the Justice Department’s Civil Division, the Fraud Section, and HHS-OIG. It follows ongoing efforts by the Justice Department’s COVID-19 Fraud Enforcement Task Force, which was created in May 2021 to combat pandemic-related fraud.
Trial Attorney Lindsay DeFrancesco of the Civil Division’s Fraud Section handled the investigation.
The settlement serves as a reminder of the government’s efforts to maintain the integrity of health care programs and to prevent fraud related to pandemic relief efforts.
