Official Site of The State of New Jersey

As part of its oversight of the Medicaid program (Medicaid), the New Jersey Office of the State Comptroller, Medicaid Fraud Division (OSC) audited Sunrise Clinical Lab, LLC (Sunrise), an independent clinical laboratory, to determine whether it billed for drug tests in accordance with applicable requirements. This audit follows several similar audits OSC conducted of independent clinical laboratories. For this audit, OSC selected a statistical sample of 183 drug testing episodes consisting of 366 claims for the period from July 1, 2017 through March 31, 2021 (Audit Period). OSC found that for 52 of 183 sample episodes (28.4 percent), Sunrise’s documentation failed to comply with legal requirements. 

In addition to identifying the documentation deficiencies above, OSC notes that for the vast majority of these deficiencies (44 out of 52), Sunrise completed drug tests without first obtaining the signed test requisitions from a referring physician or licensed practitioner. These 44 deficiencies were associated with four ordering physicians. OSC interviewed these four physicians and found that the physicians did not sign the requisition forms, were not involved in ordering decisions, or had their stamps affixed by unauthorized individuals such as laboratory specimen collectors or nursing staff. This means that Sunrise had no assurance that these tests were medically necessary or appropriate. Sunrise’s claims and Medicaid’s payments to Sunrise for these tests thus constitute a waste of Medicaid program resources. To determine the financial harm Sunrise caused to the Medicaid program, OSC reviewed a statistical sample of claims and used the results to estimate the total overpayment across Sunrise’s full universe of claims. Applying a conservative approach, OSC calculated that Sunrise received an extrapolated overpayment of at least $3,434,950.^[1]

Additionally, OSC found that for 44 of 183 sample episodes (24 percent), Sunrise did not perform at least one specific drug test that the physician or licensed practitioner ordered. While OSC is not seeking a monetary recovery for these deficiencies because they did not cause economic harm to the Medicaid program, OSC highlights these actions because Sunrise’s failure to perform requested tests may have had an adverse impact on patient care. Such adverse impacts may include, but are not limited to, establishing a less than accurate and comprehensive medical history, which may lead to inaccurate diagnoses, missed treatment decisions, and missed opportunities for further testing. 

Finally, separate from the claims in its sample universe, OSC identified nine instances during the Audit Period in which Sunrise improperly billed for definitive testing procedure codes on the same date of service for the same beneficiary. OSC also found that in six of these nine instances, the test requisitions did not include a signature from the ordering physician or licensed practitioner. For these nine deficient outlier episodes, OSC found that Sunrise received an additional non-extrapolated overpayment of $2,056 that it must repay to the Medicaid program.

Sunrise Clinical Lab, LLC (Sunrise), located in Irvington, New Jersey, has participated as an independent clinical laboratory in the New Jersey Medicaid program since July 21, 2015. Pursuant to N.J.A.C. 10:61-1.2 “‘[c]linical laboratory services’ means professional and technical laboratory services provided by an independent clinical laboratory when ordered by a physician or other licensed practitioner of the healing arts within the scope of his or her practice as defined by the laws of the state in which he or she practices.” During the audit period, Sunrise was one of the New Jersey Medicaid program’s highest-paid providers of independent clinical laboratory services.

Sunrise submitted claims to the Medicaid program primarily for presumptive and definitive drug tests. Presumptive drug tests screen for the possible use or non-use of a drug or drug class. Definitive drug tests identify specific drugs or metabolites (byproducts of a drug).

The objective of this audit was to evaluate claims for services that Sunrise billed and received payment from the Medicaid program to determine whether Sunrise complied with applicable state and federal laws, regulations, and guidance.

The scope of this audit was for the period from July 1, 2017 to March 31, 2021. This audit was conducted pursuant to the authority of the Office of the State Comptroller (OSC) as set forth in N.J.S.A. 52:15C-1 to –23, and the Medicaid Program Integrity and Protection Act, N.J.S.A. 30:4D-53 to -64.
 
To accomplish the audit objectives, OSC reviewed a probability sample of 183 sample episodes comprised of 366 unique paid claims for one presumptive drug test and one definitive drug test, both on the same date of service, for which the Medicaid program paid Sunrise a total of $33,773. OSC selected the 183 sample episodes from a population of 86,793 episodes with 173,586 unique paid claims for presumptive and definitive drug tests for which the Medicaid program paid Sunrise a total of $15,870,880. Separate from the claims in its sample universe, OSC also separately reviewed nine outlier episodes comprised of 27 claims totaling $2,530 for presumptive and definitive testing. (See Exhibit A for code descriptions.)

OSC reviewed Sunrise’s service agreements with its referring providers, test requisitions, and test results to determine whether Sunrise possessed the necessary documentation to substantiate the sample claims for these drug tests.

Medicaid regulations for clinical laboratories establish safeguards to ensure program integrity, and to prevent fraud, waste, and abuse. These rules establish requirements for medical necessity, documentation, and financial arrangements. Understanding the broader compliance framework provides essential context to understand these regulations. The following discussion outlines key provisions that regulate laboratory services and serve to protect the integrity of the program.

The relevant regulations, N.J.A.C. 10:61-1.1 et seq., impose multiple requirements on clinical laboratories as part of a comprehensive regulatory approach that was constructed to safeguard the integrity of the Medicaid program and prevent fraud, waste, and abuse. The longstanding rules, which supplement other generally applicable rules that apply to all Medicaid providers, establish guidelines to ensure the proper use of public funds. Laboratories are required to maintain detailed records of all test orders, results, and associated billing information. N.J.A.C. 10:61-1.6. The rules further mandate that standing orders must be patient-specific, medically necessary, and effective for no longer than 12 months. N.J.A.C. 10:61-1.6(c). The rules prohibit reference laboratories, service laboratories, physicians, or other providers from offering rebates, discounts, or kickbacks in any form, including money, supplies, or equipment. N.J.A.C. 10:61-2.4. Relatedly, laboratories cannot engage in arrangements in which they rent space or provide personnel to referring physicians, closing potential loopholes that could be exploited for financial gain. Ibid. These rules directly target conflicts of interest and protect taxpayer funds by ensuring ethical conduct at every step of the process.

N.J.A.C. 10:61-1.6(a) further protects Medicaid by establishing strict requirements for the authorization of clinical laboratory services to ensure that tests are medically necessary and properly documented. That regulation states: 

All orders for clinical laboratory services shall be in the form of an explicit order personally signed by the physician or other licensed practitioner requesting the services, or be in an alternative form of order specifically authorized in (b)1 through 3 below. The written order shall contain the specific clinical laboratory test(s) requested, shall be on file with the billing laboratory and shall be available for review by Medicaid/NJ FamilyCare representatives upon request.

This provision not only guards against fraudulent billing practices, unnecessary testing, and financial arrangements that could improperly influence when and which tests are ordered but also establishes an audit trail that allows for retrospective reviews. By requiring a physician’s signature, the regulation ensures that laboratory services are only provided when deemed medically necessary by a qualified professional. Requiring this explicit professional approval prevents referring providers from ordering medically unnecessary tests and drug testing laboratories from processing such unauthorized requests. Without this or a similarly effective safeguard, unscrupulous providers could generate excessive or unnecessary test orders to inflate billing, leading to wasteful Medicaid expenditures. Requiring the signed order to be maintained on file and available for review importantly provides the Medicaid program with the ability to verify the legitimacy of claims and identify potential abuses.

The signature requirement also ensures providers comply with other program integrity requirements imposed by N.J.A.C. 10:61 et seq. It functions as a direct check on financial arrangements that would violate anti-kickback laws prohibited by the rules. The regulation’s requirement that all test orders be explicitly documented and retained by the billing laboratory creates a clear audit trail, reinforcing accountability at every stage of service delivery. Physicians and licensed practitioners bear direct responsibility for ordering tests, reducing the risk of abuse by ensuring that clinical decisions remain within the purview of medical professionals rather than financially motivated entities. Without this safeguard, improper financial incentives could undermine the integrity of laboratory services.

N.J.A.C. 10:61-1.6 authorizes additional ways to authenticate the validity of testing orders that are similarly designed to ensure the physician is the one who authorizes the order. N.J.A.C. 10:61-1.6(b)(1)and (3) permit laboratories to rely on properly documented chart documentation and verbal orders followed by written or electronic confirmation within 30 days. This flexibility allows for efficient ordering while maintaining regulatory safeguards. N.J.A.C. 10:61-1.6(b)2 states:

A test request also may be submitted to the laboratory electronically, if the system used to generate and transmit the electronic order has adequate security and system safeguards to prevent and detect fraud and abuse and to protect patient confidentiality. The system shall be designed to prevent and detect unauthorized access and modification or manipulation of records, and shall include, at a minimum, electronic encryption.

The four approaches to conveying testing orders (signature, chart documentation, electronic with safeguards to prevent and detect fraud and abuse, and verbal orders with written or electronic confirmation) permitted by N.J.A.C. 10:61-1.6 provide flexibility to providers while curbing fraud, waste, and abuse. All of the permitted approaches to authenticating testing orders ensure that physicians or other licensed practitioners make the decision to order tests and that the order is explicitly approved by them and each method ensures a direct link between the test order and responsible practitioner, reinforcing accountability.

The importance of these policies and the overarching goals of N.J.A.C. 10:61 et seq., are clear from the rulemaking proceedings that led to the adoption of these rules. The regulatory history shows that the Department of Human Services, Division of Medical Assistance and Health Services (DMAHS) was focused on preventing abuses by clinical laboratories and other providers. In response to a request to relax the physician signature requirement, DMAHS in 1996 stated:

The requirement that all requests for laboratory services include a definitive order personally signed by the physician requesting services is a continuation of current policy (see N.J.A.C. 10:61-1.4(b)). The ordering practitioner, when signing for the laboratory test, is attesting to the medical necessity of the test. This requirement is pivotal to curtailing fraud and abuse. The current policy is valid and should remain unchanged. 

[28 N.J.R. 1054(a) (Feb. 5, 1996) (emphasis added).]

In 2010 to 2011, DMAHS amended N.J.A.C. 10:61-1.6 and again responded to concerns about physicians and licensed professionals being the only ones authorized to order laboratory tests. In response to a request to “reconsider the requirement for each paper order to be personally signed by the ordering practitioner,” which was said to “‘significantly detract[]’ from the practitioner’s time caring for patients,” DMAHS responded:

The Department does not believe that signing the order for a clinical laboratory service is so time consuming as to significantly detract from the time a practitioner is caring for a patient; however if that does become an issue for an individual practitioner, the Department maintains that the new alternatives to the submission of a signed order proposed at N.J.A.C. 10:61-1.6(b) are sufficient to ensure the efficient ordering of the services. All services reimbursed by the New Jersey Medicaid/NJ FamilyCare program must be certified as medically necessary. With regard to these specific rules, the authorization of orders for clinical laboratory services by a licensed practitioner is an integral part of ensuring that only medically necessary clinical laboratory services are provided to the beneficiaries and reimbursed by the program. For these reasons, no change will be made in response to the comment.

[43 N.J.R. 423(a) (Feb. 22, 2011) (emphasis added).]

Similarly, in response to a comment that providers should be permitted to rely on an “‘authorized representative’ of the ordering licensed practitioner to sign the order” given that “the licensed practitioner would retain the ultimate responsibility for the authenticity of the order because they are responsible for the actions of their staff,” which would “increase office efficiency,” DMAHS responded that:

the supervision of an ‘authorized representative’ would not necessarily be the responsibility of the individual licensed practitioner ordering the clinical laboratory services, for example, if the licensed practitioner provides services in a clinic or other setting in which multiple practitioners practice. Under the scenario suggested by the commenter, this could potentially result in the responsibility of the authenticity of the order being that of someone that has no knowledge of a beneficiary’s individual medical needs. Ensuring that the licensed practitioner requesting the laboratory services is the individual responsible for attesting to its authenticity ensures that the care and treatment of the beneficiary remains the ultimate responsibility of the practitioner familiar with the medical needs of the beneficiary. For these reasons, no change will be made in response to the comment.

[Id. at 423-24.]

In addition to N.J.A.C. 10:61, providers must comply with N.J.A.C. 10:49-9.8, which requires, among other things, providers to certify the accuracy of claims, maintain comprehensive records for at least five years, and ensure that all billed services were actually provided, thereby preventing fraudulent billing, enforcing accountability, and safeguarding Medicaid funds. Overall, these regulations reinforce program integrity and serve as a deterrent against improper billing practices.

Providers must also comply with N.J.A.C. 10:49-5.5(a)(13), which prohibits reimbursement for services when the corresponding medical records fail to adequately and legibly reflect the procedural requirements associated with the billed procedure code. Specifically, N.J.A.C. 10:49-5.5(a)(13)(i) states that “[f]inal payment shall be made in accordance with a review of those services actually documented in the provider’s health care record.” This rule ensures that Medicaid only pays for services that are properly recorded, medically justified, and compliant with professional standards. This provision serves as a safeguard against fraud, waste, and abuse by preventing providers from billing for undocumented, incomplete, or exaggerated services. By ensuring providers comply with rigorous documentation requirements, N.J.A.C. 10:49-5.5(a)(13) helps protect public funds from fraudulent claims, ensures that beneficiaries receive appropriate care, and promotes accountability among healthcare providers participating in Medicaid.

The release of this Final Audit Report concludes a process during which OSC afforded Sunrise multiple opportunities to provide input regarding OSC’s audit findings. Specifically, OSC provided Sunrise a Summary of Findings (SOF) and offered Sunrise an opportunity to discuss the findings at an exit conference. OSC and Sunrise, represented by counsel, held an exit conference during which the parties discussed OSC’s findings presented in the SOF. Before and after the exit conference, Sunrise’s counsel provided OSC a written response that disputed the basis of OSC’s extrapolation of the audit findings. Subsequently, OSC provided Sunrise a Draft Audit Report (DAR) with recommendations and instructed Sunrise to provide a Corrective Action Plan (CAP) as part of its formal response to the DAR. Sunrise submitted a formal response to the DAR; however, Sunrise failed to submit a CAP. (Sunrise’s response to the DAR is attached as Appendix A.) 

OSC addresses each argument raised by Sunrise in more detail in Appendix B to this report. After reviewing Sunrise's submission, OSC determined that there was no basis to revise any of its findings presented in this audit report.

A. Deficient Documentation and Billing Irregularities for Presumptive and Definitive Drug Testing

OSC reviewed Sunrise’s documentation to assess whether it properly documented the services billed to the Medicaid program. OSC found that in 52 of the 183 sample episodes (28.4 percent), Sunrise failed to properly document services it provided. OSC extrapolated the error dollars, $8,586 of $33,772, to the sample universe of 86,793 sample episodes (173,586 claims) totaling $15,870,880. Applying this process, OSC calculated that Sunrise received an overpayment of at least $3,434,950 from the sample universe.^[2] Set forth below is a discussion of each type of deficiency that OSC found.

1. Missing Signatures

OSC found that test requisitions for 44 of the 183 sample episodes (24 percent) failed to include the signature of the ordering physician or other licensed practitioner requesting drug testing services. Sunrise should have rejected test requisitions that lacked a physician or other licensed practitioner’s signature because without a signature from a physician or licensed practitioner, Sunrise lacked assurance that there was sufficient medical necessity to perform the requested tests. Sunrise ignored the glaring omission of signed requisitions, performed the tests, then billed and received payment from the Medicaid program for these tests. 

As part of this audit, OSC attempted to verify the ordering physicians’ level of involvement and knowledge regarding the testing requisition forms. OSC conducted sworn interviews of four ordering physicians from sample claims that OSC reviewed. During those interviews, the physicians testified that they had not affixed their signatures on the testing requisition forms. The physicians explained that they were not directly involved in the drug test ordering and submission process but instead delegated those responsibilities to other individuals who were not authorized to sign the testing requisition forms. Their approaches undermine the integrity of the testing requisition approval process because, in the absence of a physician’s signature, it is not clear whether the tests ordered were medically necessary, which is the prerequisite for ordering such tests and seeking payment by Medicaid. Allowing someone other than the physician or licensed practitioner to determine which tests are appropriate and to approve test requisitions—contrary to applicable regulations—increased the risk of harm to patients if necessary tests were not ordered and to Medicaid if unnecessary tests were ordered. 

The sworn testimony revealed additional information that raises significant concerns about the integrity of the test requisition process:

• One physician testified that due to time constraints, the specimen collector employed by Sunrise affixed the physician’s stamp on the ordering forms. The physician further explained that he paid this Sunrise employee to perform other administrative tasks in his office. 
• Another physician revealed that the ordering physician was not involved at all in the drug test ordering and submission process. This physician explained that because he was on site just two days per week, the referring provider’s specimen processing team, under the supervision of the Director of Nursing, routinely stamped his signature on the drug testing requisition forms.
• A third ordering physician revealed that the specimen collector employed by another independent clinical laboratory (not Sunrise) was responsible for collecting the specimens for both Sunrise and that laboratory and for affixing the physician’s stamp to the forms.
• A fourth ordering physician stated that she had never seen a laboratory requisition form before, including from Sunrise, and that she did not know who placed her stamps on the requisitions. She explained that she had a verbal standing order with Sunrise to perform a customized urine toxicology test for all patients under her care.

The physicians’ testimony collectively demonstrates that neither the referring providers nor Sunrise properly ensured the integrity of the test requisition process. By processing and billing the Medicaid program for test requisitions that did not include the approval of the ordering physician or licensed practitioner, as evidenced by their signatures, Sunrise violated its legal oversight responsibility and facilitated drug testing that was not supported by documentation that the tests were medically necessary. Sunrise’s acceptance of test requisitions that did not include actual signatures casts doubt on the medical necessity of the drug tests and likely led to waste and abuse of Medicaid program resources.

After the exit conference, Sunrise provided additional documentation that contained notes from ordering physicians, all of which still failed to address the deficiencies identified by OSC. The documentation provided by Sunrise still failed to demonstrate compliance with N.J.A.C. 10:61-1.6(a), which requires testing orders to be explicitly signed; N.J.A.C. 10:61-1.6(b), which requires the medical records to be physically present at the laboratory at the time of testing; and N.J.A.C. 10:61-1.6(d), which requires that all testing orders and medical records contain specified information, including test(s) to be performed. 

OSC finds that the use of initials, stamps, and/or machine-generated signatures on non-electronic media claims violates N.J.A.C. 10:49-9.8(a), which states that providers shall “certify that the information furnished on the claim is true, accurate, and complete.” In addition, this practice also violates N.J.A.C. 10:49-9.8(b)(1) and (4), which state that providers shall “keep such records as are necessary to disclose fully the extent of services provided” and that such services are “in accordance with the requirements of the . . . program.” Further, Sunrise failed to ensure that the test requisitions were signed by the ordering physician in compliance with N.J.A.C. 10:61-1.6(a), which states that “orders for clinical laboratory services shall be in the form of an explicit order personally signed by the physician or other licensed practitioner requesting the services.” Sunrise similarly did not comply with the alternatives to providing a signature permitted under N.J.A.C. 10:61-1.6(b), chart documentation, electronic records with safeguards to prevent and detect fraud and abuse, or verbal orders with written or electronic confirmation, and with N.J.A.C. 10:61-1.6 (d), which requires that all orders contain the necessary information. 

2. Definitive Testing Not Ordered

Additionally, OSC found that in 6 of the 183 sample episodes, Sunrise performed and billed for definitive drug testing that was not requested in the corresponding test requisition or billed for a greater level of service than what was ordered. 

Referring providers submitted test requisitions to Sunrise either electronically or manually. In the majority of the testing requisitions, when a referring provider submitted a manual requisition, the requisitions listed the drug tests ordered, including the type of testing (i.e., presumptive, definitive) and the specific drugs to be tested. Because these manual requisitions provided a clear description of what the referring provider ordered, OSC did not take additional steps to validate the testing ordered. However, when a referring provider submitted requisitions electronically, and in some instances when requisitions were submitted manually, the requisitions did not specify the type of testing (i.e., presumptive, definitive) or the specific drugs to be tested but instead listed a test code that corresponded to a pre-determined list of drugs to be tested. After finding that these requisitions did not contain enough information to validate the corresponding claims, OSC reviewed additional documentation to ascertain whether Sunrise properly submitted each claim. Sunrise provided drug screening agreements with its primary referring provider that listed the type of drug test ordered (i.e., presumptive, definitive) for specified drugs or drug classes. Sunrise also provided a test compendium of the unique test codes that the physician or licensed practitioner would select when ordering a drug test following the drug screening agreement. OSC found, however, that despite this documentation, Sunrise’s testing and billing in these six sample episodes was not consistent with the respective drug screening agreements or test compendium. 

The American Medical Association’s Healthcare Common Procedure Coding System codes recognize multiple levels of definitive drug testing. The definitive codes identify drugs or metabolites (byproducts of a drug) that will be tested, with billing categories that increase in cost based on the number of drug classes that will be tested. The lowest level of definitive testing, which has the lowest Medicaid reimbursement rate, covers 1 to 7 drug classes, with progressively higher reimbursement levels for 8 to 14 drug classes, 15 to 21 drug classes, and, finally, 22 or more drug classes, which has the highest Medicaid reimbursement rate.

Of these six sample episodes, in three episodes, the referring providers did not request definitive testing, but Sunrise performed and billed for such testing. In three other episodes, Sunrise billed for definitive testing involving more drug classes than the referring provider ordered.

Pursuant to N.J.A.C. 10:49-5.5(a)(13), Medicaid will not cover services billed for which the corresponding records do not adequately and legibly reflect the requirements of the procedure code utilized by the billing provider. In accordance with N.J.A.C. 10:49-5.5(a)(13)(i), “[f]inal payment shall be made in accordance with a review of those services actually documented in the provider’s health care record.”

Pursuant to N.J.A.C. 10:49-9.8(a), “all providers shall certify that the information furnished on the claim is true, accurate, and complete.”

3. Underbilled Definitive Testing

OSC found that in 2 of 183 sample episodes, Sunrise performed testing for the full number of definitive drug classes the referring provider ordered but billed a lower cost definitive code. As a result, OSC gave credit for these underbilled claims and factored them into its extrapolated calculation of Sunrise’s overpayment. 

4. Requested Testing Not Performed

In addition to downcoding claims when Sunrise billed for more drug tests than its documentation supported, OSC also found that Sunrise did not perform all drug testing that referring providers ordered. OSC found that in 44 of the 183 (24 percent) sample episodes, Sunrise did not perform at least one drug test included on the drug test order. For example, a referring provider’s test requisition instructed Sunrise to perform definitive testing of cocaine following a positive presumptive test, but Sunrise failed to test for cocaine. This reveals flaws in Sunrise’s processes. OSC is not seeking a monetary recovery for these omissions because they did not cause economic harm to the Medicaid program, but OSC notes this finding because Sunrise’s failure to perform all ordered tests created risks to patients. Such adverse impacts may include, but are not limited to, establishing a less than accurate and comprehensive medical history, which may lead to inaccurate diagnoses, missed treatment decisions, and missed opportunities for further testing.

B. Direct Review of Outlier Claims for Presumptive and Definitive Drug Testing

During the audit period, but not within OSC’s sample universe of episodes, OSC identified nine outlier episodes consisting of 27 claims totaling $2,530 where Sunrise improperly billed for some of these claims. OSC identified two separate types of deficiencies for these outlier episodes. First, six episodes lacked a physician’s signature on the requisition forms and therefore OSC denied the whole episode consisting of three claims each (18 claims), totaling $1,670. Second, for all nine episodes, each consisting of one presumptive and two definitive codes, Sunrise improperly billed for two definitive codes on the same date of service for the same recipient. Further, for three of these nine episodes, OSC denied the three higher paid definitive claims totaling $386. From this analysis, OSC found that Sunrise received an additional non-extrapolated overpayment of $2,056 ($1,670 + $386) for these nine episodes consisting of 21 claims (18 + 3). OSC did not review these nine episodes as part of its sample universe and therefore separated these episodes from the sample claims in its analysis.

Pursuant to N.J.A.C. 10:61-1.6(a), “[a]ll orders for clinical laboratory services shall be in the form of an explicit order personally signed by the physician or other licensed practitioner requesting the services.” (N.J.A.C. 10:61-1.6(b)(1), (2), and (3) provide alternative approaches to the signature requirement of N.J.A.C. 10:61-1.6(a) which Sunrise did not comply.) Pursuant to N.J.A.C. 10:49-9.8(a), “all providers shall certify that the information furnished on the claim is true, accurate, and complete.”

OSC determined that Sunrise improperly billed and received payment for 52 of the 183 sample episodes due to deficient documentation and billing irregularities related to presumptive and definitive drug testing. OSC extrapolated the sample error dollars, $8,586 of $33,773, to the sample universe of 86,793 episodes (173,586 claims) totaling $15,870,880. Applying this process, OSC calculated that Sunrise received an extrapolated overpayment of at least $3,434,950. 

OSC also found that Sunrise improperly billed for nine outlier episodes comprised of 27 claims totaling $2,530 for deficient documentation and billing irregularities for presumptive and definitive testing. OSC determined that Sunrise received an additional non-extrapolated overpayment of $2,056 for 21 of 27 claims. 

In sum, OSC seeks to recover a total overpayment of $3,437,006 ($3,434,950 + $2,056).

Sunrise shall:

1. Reimburse the Medicaid program the overpayment amount of $3,437,006.
2. Ensure that it properly maintains all orders for clinical laboratory services and all records and documentation supporting its claims in a manner that complies with applicable state and federal laws, regulations, and guidance.
3. Maintain the necessary documentation and ensure that it only performs and bills for those drug tests ordered by the physician or other licensed practitioner requesting such services.
4. Ensure all test orders indicate the test(s) to be performed, including the specific drugs and class of drugs as defined by the American Medical Association and that all test requisitions comply with all federal and state requirements prior to performing the requested drug tests.
5. Ensure that all drug testing ordered by a physician or licensed practitioner is performed and reported on the drug test results.
6. Ensure that all claims for drug tests comply with all applicable state and federal laws, regulations, and guidance.
7. Provide training to staff to foster compliance with Medicaid requirements under applicable state and federal laws and regulations.
8. Provide OSC with a Corrective Action Plan indicating the steps it will take to correct the deficiencies identified in this report.