Signal Diagnostics agrees to pay $20.5M to settle COVID-19 testing overpayment claims

Signal Diagnostics LLC has agreed to pay the United States $20.5 million to resolve allegations that it violated the False Claims Act by knowingly retaining federal overpayments and improperly avoiding its obligation to repay funds received for COVID-19 testing of patients who had health insurance, the Justice Department announced.

The settlement involves the Health Resources and Services Administration’s COVID-19 Uninsured Program. According to the Justice Department, the program reimbursed eligible providers between approximately May 2020 and April 2022 for COVID-19 tests, testing-related items and services, treatment and vaccines provided to uninsured individuals. Signal provided COVID-19 tests at public testing sites and client sites during the public health emergency, the department said.

Between October 2020 and March 2022, Signal submitted claims to the program for testing services and specimen collection, the department said. The government alleges that around January 2022, the company began an internal audit to determine whether it had submitted ineligible claims and identified claims for people who had insurance.

According to the government’s allegations, the audit identified errors that caused claims for insured individuals to be submitted to the program. These included instances in which Signal’s internal system created multiple profiles for the same individuals with conflicting insurance information, and claims were submitted despite alternative insurance being listed on file.

The government alleges that from January 2022 to May 2023, Signal continued its audit and calculated how much it had been overpaid, but knowingly and improperly avoided its obligation to repay HRSA.

“When companies knowingly retain federal healthcare program funds they were not entitled to receive, they violate the public’s trust and the law,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. He said the settlement reflects the department’s commitment to protecting taxpayer dollars.

Acting Deputy Inspector General for Investigations Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General said that by knowingly avoiding repayment, Signal “undermined the integrity of a program designed to support uninsured patients during a national public health emergency.” She said her office will continue working with law enforcement partners to hold accountable entities that misuse federal health care dollars.

The Justice Department said the resolution resulted from a coordinated effort by the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG. Trial attorneys Elizabeth J. Kappakas, Lindsay DeFrancesco and James Nealon handled the matter.

The department also said the administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to combat fraud, waste and abuse in federal programs. It said the Civil Division’s False Claims Act enforcement will support their missions.

The claims resolved by the settlement are allegations only, and there has been no determination of liability, the department said.