Averhealth to Pay Over $1.3 Million to Resolve False Claims Act Allegations Related to Drug Tests Used in Michigan’s Children’s Protective Services & Foster Care Programs

DETROIT– United States Attorney Dawn N. Ison announced today that Avertest, LLC, a forensic drug testing company based in Richmond, VA, and which does business nationwide under the name Averhealth, has agreed to pay $1,344,621 to settle allegations that it knowingly violated the False Claims Act (FCA) by submitting to the Michigan Department of Health and Human Services (MDHHS) improper claims for payment for drug tests.

Joining in the announcement was Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG).

In 2019, Averhealth began performing drug screening and confirmation testing for the State of Michigan’s Children’s Protective Services and Foster Care programs under a contract with MDHHS. To pay for these services, MDHHS utilized funds from the Social Services Block Grant, which provides annual federal assistance to states to support social services programs and is administered by the U.S. Department of Health and Human Services Administration for Children and Families.

The settlement announced today resolves allegations that from May 15, 2019, through November 30, 2020, Averhealth violated the FCA when it knowingly submitted, or caused the submission of, claims for payment to MDHHS, and knowingly made statements material to those claims, which concerned positive drug test results for oral fluid samples that were not confirmed using a mass spectrometric method analytically different from the screening method, and did not conform to the terms of the contract between Averhealth and MDHHS.

“Averhealth failed to meet its commitments to MDHHS yet continued to claim entitlement to payment for its nonconforming services,” said U.S. Attorney Ison. “This outcome highlights our Office’s continued commitment to hold accountable any business or person who is dishonest in their dealings with programs funded by the Federal Government.”

The civil settlement includes the resolution of claims brought by Dr. Sarah Riley under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. Dr. Riley will receive $228,586 as part of the settlement. The qui tam case is captioned U.S. ex rel. Riley v. Avertest, LLC d/b/a Averhealth, No. 2:21-cv-10560 (E.D. Mich.).

This matter was handled by Assistant U.S. Attorney Anthony Gentner from the United States Attorney’s Office for the Eastern District of Michigan, with assistance from HHS-OIG.

The investigation and resolution of this matter illustrates the government’s emphasis on combating fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

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