Calloway Labs Indicted

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Anonymous

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Calloway Labs was indicted on Friday by a Mass. Grand Jury for Medicaid fraud. Go to the Boston Herald or the state attorney generals website, Martha Coakley, for all the gory details.
 


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Jill Butterworth
(617) 727-2543
MARTHA COAKLEY

ATTORNEY GENERAL
July 02, 2010 - For immediate release:
Woburn Drug Screening Lab Indicted for Medicaid Fraud and Kickback Scheme
WOBURN — A Woburn-based clinical testing laboratory has been indicted for allegedly orchestrating an extensive Medicaid Fraud and kickback scheme using “straw companies” and overcharging the state’s Medicaid program, Attorney General Martha Coakley announced today.
A Middlesex Grand Jury returned 42 indictments yesterday against Callow Laboratories, Inc. (“Calloway”), two of its principals, and two employees of a sober house in connection with a wide-ranging investigation by Attorney General Coakley’s Medicaid Fraud Division.

The indictments allege that Calloway, Chief Executive Officer Arthur Levitan, and Chief Operating Officer Patrick Cavanaugh, engaged in a pervasive kickback scheme involving two straw companies which funneled kickbacks to sober houses, as well as paid middlemen and a medical office to illegally obtain urine drug screening business paid by MassHealth, the Commonwealth’s Medicaid program. The Commonwealth alleges that MassHealth paid in excess of $10.6 million for urine drug screen business obtained by Calloway as a result of these illegal kickbacks.

Other indictments returned today allege submission of false claims to MassHealth, Larceny Over $250, and Corruption of a Witness.

The defendants are charged as follows:

Calloway Laboratories, Inc.
Medicaid False Claims (3 counts)
Medicaid Kickbacks (16 counts)
Larceny over $250 (2 counts)

Arthur Levitan, 38, of Weston
Medicaid Kickbacks (12 counts)

Patrick Cavanaugh, 46, of Gloucester
Medicaid Kickbacks (5 counts)
Corruption of a Witness (1 count)

William Maragioglio, 41, of Malden
Medicaid Kickbacks (2 counts)

Kelli Ann Cavanaugh, 41, of Lynn
Medicaid Kickbacks (1 count)

The indictments allege that between 2005 and 2007, Calloway set up two corporations, JAC Resources, Inc. (“JAC”) and MJK & Associates, LLC (“MJK”), and a bank account for the purpose of carrying out a Medicaid Fraud kickback scheme. Calloway, Levitan and Cavanaugh allegedly made a series of inappropriate kickbacks through JAC, MJK and the bank account in order to induce sober houses to order urine drug screens from Calloway. Payments for those tests were then made to Calloway by MassHealth, a state program that provides health insurance for the economically disadvantaged.

These indictments allege that Calloway made inappropriate payments to Maragioglio, owner and manager of New England Transitions, and to Cavanaugh, the sister of Patrick Cavanaugh and a former manager of New England Transitions, a group of sober houses, in return for ordering, arranging for or recommending that urine drug screens for the residents of the sober houses be performed by Calloway.

It is alleged that payments to third parties to induce the ordering of drug screens from Calloway continued into 2010. Upon learning that a woman had been subpoenaed by the Attorney General’s Office to testify before a grand jury, it is alleged that Cavanaugh offered her a highly compensated sales position with Calloway.

The indictments further allege that Calloway paid an office manager and the salaries of office staff of a Brighton medical office to induce the ordering of drug screens from Calloway.

In addition to the schemes outlined above, it is alleged that Calloway was falsifying laboratory records and submitting claims to MassHealth for urine drug screens that were not ordered by an authorized prescriber for a medically necessary purpose, a requirement of the MassHealth program.

After a thorough investigation, the case was presented to a Middlesex Grand Jury which returned indictments yesterday against the defendants. The defendants will be summonsed for arraignment in Middlesex Superior Court at a later date.

Assistant Attorney General Toby Unger, of Attorney General Coakley’s Medicaid Fraud Division, is the prosecutor assigned to this case. The case was investigated by investigators Joseph Shea; Denise Long; Lisa Bailey; Donna Mitchell and Assistant Investigators Erica Schlain and Bridget Horan. Both the Massachusetts Medicaid Program and the Department of Public Health assisted in this investigation.
 






one of the other players will, or should, buy them out. Wait for the top to crumble then purchase at rock bottom pricing. If nothing else, you get current lab equipment and customers. Although, I guess you would have to figure out which of those customers you can continue to ethically do business with and which of those you cant.
 


Who wants to buy a bunch of GC/MS when the industry has gone to HPLC? Calloway is going to go away-Welcome to the land of a corporate integrity agreement, and once accounts get wind of this- they will flock to the first company in the door.

Bye Bye..
 


I worked for calloway for a long time and I always thought there was something sketchy going on there. Does anyone know what is going to happen to them? I still know alot of people there and would hate to see them lose their jobs because of corporate greed.
 


Anonymous said:
Who wants to buy a bunch of GC/MS when the industry has gone to HPLC? Calloway is going to go away-Welcome to the land of a corporate integrity agreement, and once accounts get wind of this- they will flock to the first company in the door.

Bye Bye..
Click to expand...

Do you think doctors give a shit about HPLC or GC/MS? Try getting into a discussion about HPLC and see how far your conversation goes. They are worried more about how much medicare will reimburse them for the screens. The heydays of the full service labs are over. They are tired of dealing with the poor service and greed from the these lab companies. This is why the big pain offices are buying their own units and billing out for the screens.
 


Anonymous said:
one of the other players will, or should, buy them out. Wait for the top to crumble then purchase at rock bottom pricing. If nothing else, you get current lab equipment and customers. Although, I guess you would have to figure out which of those customers you can continue to ethically do business with and which of those you cant.
Click to expand...

Maybe these labs will buy them?

http://doj.nh.gov/publications/nreleases2005/051805dominion.html

http://www.mass.gov/?pageID=cagopre...=2007_10_18_boston_clinical_lawsuit&csid=Cago

http://www.mass.gov/?pageID=cagopre...&f=2007_09_05_willow_lab_settlement&csid=Cago
 


Anonymous said:
Maybe these labs will buy them?

http://doj.nh.gov/publications/nreleases2005/051805dominion.html

http://www.mass.gov/?pageID=cagopre...=2007_10_18_boston_clinical_lawsuit&csid=Cago

http://www.mass.gov/?pageID=cagopre...&f=2007_09_05_willow_lab_settlement&csid=Cago
Click to expand...

Now that Massachusetts has mandated health care for everyone in the State, they are broke. (Obamacare Lite)
Taking it back is the only game in town now, for details so small as to be laughable. The Salem Witchhunts have not ended in this state yet.

http://www.mass.gov/?pageID=cagopre..._02_11_life_laboratories_settlement&csid=Cago
 


I work for another company but I think Calloway is doing the same thing in NJ. I have tried to get business there from clinics, most of which is medicaid. I find out that not only is that clinic using Calloway but the owner is a employee of the company. Is this legal?
 


Most of the employees that knew what was going on, or asked questions about what was going on, are no longer employed there. Very sketchy people running a very sketchy company. I have no doubt they are doing this in more than one state. I hope all the people at the top involved in this scam crumble and another more reputable company takes over to save the employment of the little people just trying to make it.
 




Anonymous said:
Most of the employees that knew what was going on, or asked questions about what was going on, are no longer employed there. Very sketchy people running a very sketchy company. I have no doubt they are doing this in more than one state. I hope all the people at the top involved in this scam crumble and another more reputable company takes over to save the employment of the little people just trying to make it.
Click to expand...

You could say the same thing about Ameritox
 


Anonymous said:
Any company billing $1000 for a $25 test is committing fraud. This is only the start. Good luck to you. Audits are coming.
Click to expand...

$1000 is not Calloway, but definately AmeriCox! Balance bill the sh*t out of the patient at a grand a pop, you dopes, and wonder why you lose business!!! Your accounts doctors think you suck after a few months of listening to their patients complain about your gouging them!
 




Name a lab who hasnt been investigated at one point or another? The state is looking for money wherever they can get it. Easy target. If you probe deep enough I would place bets that every lab out there has something they could be fined for. It makes me laugh that some labs such as Willow are out there throwing the indictments around to current calloway customers. Hello you morons, you went through the same thing!!! They are a joke.
 


Anonymous said:
Name a lab who hasnt been investigated at one point or another? The state is looking for money wherever they can get it. Easy target. If you probe deep enough I would place bets that every lab out there has something they could be fined for. It makes me laugh that some labs such as Willow are out there throwing the indictments around to current calloway customers. Hello you morons, you went through the same thing!!! They are a joke.
Click to expand...

Actually, the Mass AG is also well aware of the Ameritox "Panel 16" that is confirming negative screening samples, and they are investigating this as we speak. Hold onto your hats folks, you are in for some fun ahead! You are living in a glass house!!!
 




Anonymous said:
I work for another company but I think Calloway is doing the same thing in NJ. I have tried to get business there from clinics, most of which is medicaid. I find out that not only is that clinic using Calloway but the owner is a employee of the company. Is this legal?
Click to expand...
I work for a new lab in NJ and Calloway is changing the way we do business in our industry. Never before has any of us hired people to monitor urines thats why they are getting most of the business across the country. If we are going to keep up with them we are going to have to follow them, I found out it's legal to do that. As for that owner employee I found out that's legal also in NJ most of the politicians have 2 or more jobs, who can afford to live off 1 job in this economy.
 



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