Is It Illegal for Labs to Run Tests That Weren’t Ordered? Lab Test Fraud
If you work at a medical lab or a physician’s office and have come across tests being run that no doctor or patient actually ordered, you may be wondering: Is this legal? Can I report it? Will I be protected if I do?
The short answers: No, lab test fraud is not legal. Yes, you can report it. And yes, if you work with an experienced whistleblower attorney, there are laws that protect you—and you may even be entitled to a financial reward.
Lab Test Fraud – Tests That Weren’t Ordered
In many recent investigations, labs have come under fire for automatically running expensive panels or add-on labwork that neither a physician nor a patient requested. These extra tests may be bundled with valid ones and quietly billed to Medicare or Medicaid, driving up reimbursement for the lab. But doing this is not only unethical—it’s fraud.
The federal government considers lab test fraud a violation of the False Claims Act (FCA), which prohibits billing the government for services that weren’t actually provided or were not medically necessary. Running and billing for unrequested lab tests falls squarely into that category.
And it’s not a small issue. This kind of fraud drains Medicare and other public healthcare programs, diverting taxpayer funds and putting honest healthcare providers at a disadvantage. If you are a medical provider, it can also lead to patient anxiety about bills they weren’t expecting.
A Real Case: Gamma Healthcare’s $136 Million Settlement
One of the most significant recent examples of lab test fraud involved Gamma Healthcare, Inc., a lab based in Missouri. In 2023, the U.S. Department of Justice announced that Gamma and three of its owners agreed to pay $136 million to resolve allegations that they billed Medicare for lab tests that were never ordered by treating physicians.
According to the DOJ, Gamma billed the government for polymerase chain reaction (PCR) tests and respiratory pathogen panels that were automatically performed without a doctor’s order. In many cases, a provider would request a basic urinalysis or COVID-19 test—but the lab would then tack on an expensive respiratory panel or additional tests and bill Medicare as if they were required.
The scheme didn’t stop there. Gamma was also accused of paying kickbacks to marketers and healthcare providers in exchange for referrals, another major violation of federal law. These illegal payments helped drive business to Gamma while inflating Medicare claims for tests that should never have been run in the first place.
The whistleblower who brought the case received a substantial portion of the recovery—a reward provided under the qui tam provisions of the FCA, which allow private individuals to sue on behalf of the government and share in any resulting settlement or judgment.
What Should You Do If You See This Happening?
If you work in a lab or medical practice and notice that your employer is running or being billed for tests that weren’t ordered, it’s important to speak with a whistleblower attorney as soon as possible.
Here’s why:
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The conduct is illegal. Running unnecessary or unrequested tests and billing Medicare or Medicaid is lab test fraud.
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You are protected. Federal law protects whistleblowers from retaliation—including termination, demotion, harassment, or blacklisting.
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You may be eligible for a financial reward. If your case leads to a successful settlement or recovery, you could receive 15% to 30% of the amount the government recovers.
An attorney can help you report the fraud confidentially and file what’s known as a “qui tam” lawsuit. These lawsuits are filed under seal, meaning they’re not publicly disclosed while the government investigates. The process is designed to protect whistleblowers while the DOJ determines whether to intervene and pursue the case.