Diabetes Blood Test Distributor GlycoMark Agrees to Pay $195,000 to Settle False Claims Act Allegations

PHILADELPHIA—United States Attorney Jacqueline C. Romero announced that GlycoMark, Inc., a joint-venture subsidiary owned by Toyota Tsusho Corporation, Toyota Tsusho America, Inc., and Nippon Kayaku Co., Ltd., has agreed to pay $195,000 to resolve allegations that it violated the False Claims Act by encouraging its customers to submit claims for the GlycoMark test after the test was no longer approved for reimbursement to Medicare and Medicaid.

Between approximately 2016 and 2018, GlycoMark distributed the GlycoMark test, which was used to detect hyperglycemia and hyperglycemic excursions. According to GlycoMark, the GlycoMark test is used for a “more complete assessment of glycemic control to identify patients that may benefit from closer diabetes management.” 

Prior to September 1, 2016, the GlycoMark test was eligible for reimbursement under Medicare’s Current Procedural Terminology (CPT) code 84378, providing coverage for a variety of tests related to blood sugars. In September 2016, a Medicare Administrative Contractor (MAC) issued Local Coverage Determination (LCD) L36761, specifically prohibiting Medicare reimbursement for the GlycoMark test, stating that the GlycoMark test was not reasonable or necessary for the management of diabetes, and is not covered. The non-coverage policy went into effect on October 17, 2016. 

Despite knowing of the prohibition of Medicare reimbursement and being aware of the billing oversight for the GlycoMark test, the United States alleges that GlycoMark, from November 1, 2016 to May 30, 2019, knowingly caused to be submitted claims for GlycoMark tests that it knew were not covered by the Federal health care programs. The United States further contends that GlycoMark encouraged its customers to submit GlycoMark tests for Medicare reimbursement in two ways: (1) by encouraging labs to continue billing for the GlycoMark test using CPT code 84378; and (2) by printing and distributing marketing materials that stated “reimbursed by Medicare” and by displaying CPT code 84378 with no disclaimer that Medicare reimbursement is prohibited. 

“We are committed to ensuring that testing manufacturing companies appropriately bill Medicare,” said U.S. Attorney Romero. “GlycoMark allegedly encouraged labs to charge the government for quantities of tests after it was aware that federal programs would not reimburse for this testing. Those who engage in these deceptive practices in the name of profits will be held accountable.”

“Testing manufacturing companies have a responsibility to follow Medicare regulations,” stated Maureen R. Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to working with the United States Attorney’s Office to investigate allegations of inappropriate insurance claims and to safeguard the integrity of our federal health care programs.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Jeffery Johnston v. GlycoMark, Inc., et al., No. 2:18 -cv-5033 (E.D. Pa.) and was filed by Thomas W. Sheridan of Sheridan & Murray LLC in Philadelphia, PA.

The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General. The investigation and resolution obtained in this action were handled by United States Attorney Jacqueline C. Romero and Auditor George Niedzwicki. 

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