Orchard Laboratories Corporation agreed to pay $6,494,290.00 to settle allegations that it improperly billed Medicare for over-the-counter COVID-19 tests, resolving claims tied to tests billed but not requested or received between March 1, 2023 and May 11, 2023.
Orchard Laboratories Corporation reached a settlement of $6,494,290.00 to resolve allegations under the False Claims Act related to billing for over-the-counter COVID-19 tests. The claims focus on a narrow window when Medicare covered up to eight OTC tests per eligible beneficiary monthly, a program that ran from April 4, 2022 through May 11, 2023. Beneficiaries did not need prescriptions for those tests, but they had to request them from an eligible provider.
Federal investigators launched a probe after complaints suggested Orchard billed Medicare for tests that beneficiaries never ordered or received. The settlement addresses alleged improper billing for tests during March 1, 2023 through May 11, 2023. Orchard had participated in the OTC COVID-19 test program as a clinical reference laboratory.
The investigation was carried out by the United States Attorney’s Office for the Eastern District of Michigan in coordination with the FBI and HHS-OIG. Officials say tip lines and complaints helped flag billing patterns that warranted scrutiny. Assistant United States Attorneys John Postulka and Gregory Dickinson handled the matter for the U.S. Attorney’s Office for the Eastern District of Michigan.
U.S. Attorney Jerome F. Gorgon Jr. commented on the case, stressing enforcement tools. “The False Claims Act is an important tool to combat fraudulent medical billing,” he said. “Our office is coming for healthcare providers who cheat the government.”
HHS-OIG Special Agent in Charge Thomas Ethridge emphasized taxpayer protection in his statement about the settlement. “Today’s settlement reinforces our steadfast commitment to protecting the integrity of federal health care programs and ensuring accountability when violations occur,” said Special Agent in Charge Thomas Ethridge of the U.S. Dept. of Health and Human Services Office of Inspector General (HHS-OIG). “We remain dedicated to safeguarding taxpayer dollars, and we will continue to work with our law enforcement partners to uphold the trust placed in us by the public.”
FBI Detroit also highlighted the importance of honest billing by providers. “Protecting taxpayer-funded healthcare programs is essential to preserving public trust and ensuring federal healthcare dollars are used as intended,” said Jennifer Runyan, Special Agent in Charge of the FBI Detroit Field Office. “Healthcare providers entrusted with federal healthcare dollars have a responsibility to bill honestly and accurately. I commend the outstanding work of the members from FBI Detroit and HHS-OIG resolving this matter.”
The Justice Department has been sharpening its focus on healthcare fraud through new structures and initiatives. On April 7, the Department announced the National Fraud Enforcement Division, known as the Fraud Division, to pursue fraud against federal programs. That work ties into broader efforts announced by the administration and task forces aimed at cutting down fraud, waste, and abuse in benefit programs.
Authorities note that the settlement resolves allegations and does not determine liability; the payment ends the government’s civil claims related to the specified billing period. The case is an example of how audits, complaints, and interagency collaboration can uncover questionable billing patterns. Officials encourage reporting suspected fraud to oversight channels to help preserve program integrity.
Tips and complaints remain a key source of information for fraud investigations, and the public can report concerns to HHS through established channels. The U.S. Department of Health and Human Services hotline accepts reports at 800-HHS-TIPS (800-447-8477). Investigators say that information from all sources helps target enforcement where it’s most needed.
The resolution demonstrates coordinated action by multiple agencies to protect federal health care programs and taxpayer dollars. While the claims resolved by the settlement remain allegations, the case illustrates enforcement priorities around pandemic-era programs and billing practices. Agencies involved say they will continue to work together to detect and address improper billing in healthcare programs.
