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) conducted this audit to determine whether Star Laboratory Corporation (Star), an independent clinical laboratory, billed for drug tests in accordance with applicable requirements. For the period from July 1, 2017 through March 31, 2021 (audit period), OSC selected a probability sample of Star’s claims comprised of 148 episodes with 296 unique paid claims for one presumptive and one definitive drug test for which the Medicaid program paid Star a total of $19,420. OSC selected the sample from a population of 56,871 episodes with 113,742 paid claims for presumptive and definitive drug tests for which the Medicaid program paid Star a total of $7,538,640.

OSC found that for 81 of 148 (54.7 percent) sample episodes, Star’s documentation failed to comply with legal requirements. Specifically, OSC found that in 79 episodes, Star performed and billed for drug tests that lacked required signatures from the referring physician or licensed practitioner. In addition, OSC found that in five episodes, Star performed and billed for a higher level of testing than what was included on the test requisition, with three of these episodes having both deficiencies. By performing drug tests in these instances, each of which failed to meet one or more regulatory requirements, Star lacked assurance that referring providers authorized these tests or that the tests were medically necessary, resulting in potentially unnecessary drug tests, and the waste and abuse of Medicaid program resources. Notwithstanding those obvious bases for rejecting these test requests, Star improperly accepted and processed them, then billed and accepted Medicaid program payments for these tests, as well as for higher-level tests than requested. OSC extrapolated the sample error dollars, $9,615 of $19,420, to the sample universe of 56,871 episodes (113,742 claims) totaling $7,538,640. OSC calculated that Star received an overpayment of at least $3,332,626,^[1] which Star must repay to the Medicaid program.

Additionally, OSC found that for 51 of 148 (34.5 percent) sample episodes in OSC’s sample, Star 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 Star’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 seven instances during the audit period in which Star billed for presumptive and definitive testing when the test requisitions lacked a signature from the ordering physician or licensed practitioner. For one of these seven instances, Star also billed for definitive testing even though the test results did not document that Star had performed any definitive testing. In addition, separate from these seven instances, OSC identified one instance in which Star improperly billed for two definitive testing procedure codes on the same date of service for the same beneficiary, and, in this instance, the test requisition also lacked a signature from the ordering physician or licensed practitioner. For these eight deficient outlier episodes, OSC found that Star received an additional non-extrapolated overpayment of $1,208 that it must repay to the Medicaid program.

Star Laboratory Corporation (Star), located in Piscataway, New Jersey, has participated as an independent clinical laboratory in the New Jersey Medicaid program since November 7, 2012. 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, Star was one of the New Jersey Medicaid program’s highest-paid providers of independent clinical laboratory services.

Star 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 Star billed and received payment from the Medicaid program to determine whether Star 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 148 sample episodes comprised of 296 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 Star a total of $19,420. OSC selected the audit sample from a population of 56,871 episodes with 113,742 unique paid claims for presumptive and definitive drug tests for which the Medicaid program paid Star a total of $7,538,640. Separate from the claims in its sample universe, OSC also separately reviewed eight outlier episodes comprised of 17 claims totaling $1,208 for presumptive and definitive testing. (See Exhibit A for code descriptions.)

OSC reviewed Star’s service agreements with its referring providers, test requisitions, and test results to determine whether Star possessed the necessary documentation to substantiate the 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 clear 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 to protect the integrity of the program.

The relevant regulations, N.J.A.C. 10:61, impose multiple requirements on clinical laboratories as part of a comprehensive regulatory approach that was constructed to safeguard the integrity of Medicaid and prevent fraud, waste, and abuse in an industry with a history of corruption in New Jersey. The longstanding rules, which supplement other generally applicable rules that apply to all Medicaid providers, establish clear guidelines to ensure the integrity 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. 10:61-2.4 prohibits reference laboratories, service laboratories, physicians, or other providers from offering rebates, discounts, or kickbacks in any form, including money, supplies, or equipment. Moreover, 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. 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 provides the Medicaid program with a crucial 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. 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(a) 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 preventing 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. Further, 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 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 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 Star multiple opportunities to provide input regarding OSC’s audit findings. Specifically, OSC provided Star a Summary of Findings (SOF) and offered Star an opportunity to discuss the findings at an exit conference. OSC and Star, represented by counsel, held an exit conference during which the parties discussed OSC’s findings in the SOF. After the exit conference, Star’s counsel provided OSC a written response that disputed the missing signatures on the testing requisitions (See Appendix A.) After considering Star’s response, OSC conducted a sworn interview of the ordering physician. Subsequently, OSC provided Star a Draft Audit Report (DAR) with recommendations and instructed Star to provide a Corrective Action Plan (CAP) as part of its formal response to the DAR. Star submitted a formal response to the DAR; however, Star failed to submit a CAP. (Star’s response to the DAR is attached as Appendix B.)

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

A. Auditee Comments Post Summary of Findings

Following the exit conference, Star’s counsel submitted a written response to the SOF in which Star disputed the missing signatures on the testing requisitions, asserting that labels bearing the ordering physician’s initials were affixed to the requisitions in place of signatures in conjunction with having yearly facility-wide standing order forms. Star’s response further explained that, rather than signing the testing requisitions, the physician associated with these missing signatures “printed an electronic label generated from [the referring providers’] Methasoft EMR [electronic medical record] system. The printed label was affixed to the paper requisition form and evidenced [the physician’s] intent and request for the applicable drug tests.” Star also stated that “[t]here is no dispute that [the physician] intended and requested the lab tests by printing and affixing the label on the requisition forms as agreed.” In sum, Star claimed that the labels, generated from the Methasoft EMR system that included the physician’s printed initials, served as evidence of the physician’s intent and request for the relevant drug tests. See Appendix A.

B. Summary of the Referring Provider's Sworn Interview

To verify Star’s claims regarding the ordering physician’s level of involvement and knowledge of the testing requisition forms, OSC conducted a sworn interview of the ordering physician. From this interview, OSC confirmed that, contrary to Star’s assertions, the ordering physician neither printed nor affixed any labels to the testing requisition forms during the audit period. Rather, the physician explained that he was not involved in the drug test ordering and submission process. Under oath, the physician stated as follows: “I had no involvement. There was a written form with my signature that gave permission to run the test.” Furthermore, in response to being asked whether he reviewed the drug test orders prior to submission to Star, the ordering physician stated, “No, it’s impossible” due to the high volume of patients at the clinic and further stated that “I can’t be checking every form.” The physician also disclosed that the responsibility for printing and affixing labels to drug requisition forms rested with the Director of Nursing: “The DON, Director of Nursing will print out the label with my initials on it and all the standard labs will be done.” The physician also advised that he was not aware of any instances when Star did not perform drug tests that were included on the testing requisition forms. Despite that statement, OSC found that in 51 out of 148 sample episodes, Star did not perform at least one specific drug test included on the drug test order. The physician’s apparent failure to recognize that Star performed fewer tests than the physician had ordered raises a troubling question as to whether referring providers are reviewing drug test results for their patients. Out of concern for patient care and program integrity, OSC highlights this point in the event that this referring provider’s apparent lack of due diligence in reviewing test results is emblematic of a broader problem in this area.

Star claimed that the ordering physician reviewed all testing requisitions, but the sworn interview revealed that the physician did not follow the signature protocol as asserted. Star’s documented failure to perform requested tests and its acceptance of test requisitions that obviously lacked required signatures raise serious concerns about Star’s potential waste and abuse of Medicaid program resources.

C. Additional Auditee Comments Post Sworn Interview

After the sworn interview, Star’s counsel submitted a supplemental response. This response requested that OSC rescind its SOF report, alleging that OSC relied upon insufficient evidence to support the audit findings. OSC found no reason to withdraw its SOF. OSC conducted the sworn interview of the referring provider to test the veracity of claims made by Star, through its counsel. Through this process, OSC found that the information provided by Star was unsupported and contradicted by the referring provider’s sworn testimony. In sum, Star did not present any evidence that would compel OSC to rescind these findings.

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

OSC reviewed Star’s documentation to assess whether it properly documented the services billed to the Medicaid program. OSC found that in 81 of the 148 sample episodes (54.7 percent), Star failed to properly document services it provided, with three sample episodes including multiple deficiencies. OSC extrapolated the error dollars, $9,615 of $19,420, to the sample universe of 56,871 sample episodes (113,742 claims) totaling $7,538,640. Applying this process, OSC calculated that Star received an overpayment of at least $3,332,626^[2] from the sample universe. Set forth below is a discussion of each type of deficiency that OSC found.

1. Missing Signatures

OSC found that test requisitions for 79 of the 148 sample episodes (53.4 percent) failed to include the signature of the ordering physician or other licensed practitioner requesting drug testing services in a written requisition. Star 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, Star lacked assurance that there was sufficient medical necessity to perform the requested tests. Star ignored the glaring omission of signed requisitions, performed the tests, then billed and received payment from the Medicaid program for these tests.

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 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, Star 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.” Star 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 with safeguards to prevent and detect fraud and abuse, or verbal orders with written or electronic confirmation.

2. Presumptive and Definitive Testing Not Ordered

Additionally, OSC found that in 5 of the 148 sample episodes, Star performed and billed for presumptive or definitive drug testing that was not requested in the corresponding test requisition or billed for a greater level of service from what was ordered, with three of these sample episodes also failing to contain the necessary ordering physician or licensed practitioner signature.

Referring providers submitted test requisitions to Star either electronically or manually. When a referring provider submitted a manual requisition, the requisition 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 have to perform any additional steps to validate the testing ordered. When a referring provider submitted a requisition electronically, however, the requisition did not specify the type of testing 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 the electronic requisitions did not contain enough information to validate these claims, OSC reviewed additional documentation to ascertain whether Star properly submitted each claim. Star provided drug screening agreements with its primary referring provider that listed the type of drug test ordered for specified drugs or drug classes. Star 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, the testing performed and billed in these five 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.

In one of these five sample episodes, the referring provider did not request either presumptive or definitive testing, but Star billed both for both types of testing. In three of these five sample episodes, the referring provider did not request definitive testing, but Star performed and billed for it. For the remaining one of these five sample episodes, Star billed for a greater level of definitive testing than what the referring provider had 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. Requested Testing Not Performed

In addition to downcoding claims when Star billed for more drug tests than its documentation supported, OSC also found that Star did not perform all drug testing that referring providers ordered. OSC determined that in 51 of the 148 sample episodes (34.5 percent), Star did not perform at least one drug test included on the drug test order. For example, a referring provider’s test requisition instructed Star to perform definitive testing of cocaine following a positive presumptive test, but Star failed to test for cocaine. OSC is not seeking a monetary recovery for these omissions because they did not cause economic harm to the Medicaid program, but OSC highlights this finding because Star’s lack of oversight may have had an adverse effect 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.

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 seven outlier episodes in which Star improperly billed an outdated procedure code for presumptive testing. For each of these seven episodes, Star billed for presumptive and definitive testing when the test requisitions lacked a signature from the ordering physician or licensed practitioner. For one of these seven instances, Star also billed for a definitive test even though the test results did not document that Star had performed a definitive test. OSC also identified an additional instance when Star improperly billed for two definitive testing procedure codes on the same date of service for the same beneficiary, and, in this instance, the test requisition also lacked a signature from the ordering physician or licensed practitioner. Since OSC had not reviewed these eight episodes as part of its sample universe, OSC separated these episodes, comprised of 17 claims totaling $1,208, from the sample claims in its analysis. From this analysis, OSC found that Star received an additional non-extrapolated overpayment of $1,208 for these eight episodes.

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) with which Star 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 Star improperly billed and received payment for 81 of the 148 sample episodes due to deficient documentation and billing irregularities related to presumptive and definitive drug testing. OSC extrapolated the sample error dollars, $9,615 of $19,420, to the sample universe of 56,871 episodes (113,742 claims) totaling $7,538,640. Applying this process, OSC calculated that Star received an extrapolated overpayment of at least $3,332,626.

OSC also found that Star improperly billed for eight outlier episodes comprised of 17 claims totaling $1,208 for deficient documentation and billing irregularities for presumptive and definitive testing. OSC determined that Star received an additional overpayment of $1,208 for these eight episodes for which OSC seeks a direct recovery.

In sum, OSC seeks to recover a total overpayment of $3,333,834 ($3,332,626 + $1,208).

Star shall:

1. Reimburse the Medicaid program the overpayment amount of $3,333,834.
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.
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.