Statement issued by company spokesman.
Friday, April 6, 2012
The following is a statement issued by Calloway Labs, in regard to our story Woburn Company To Pay For Defrauding Medicaid. David Ball, a spokesman for Calloway Labs, issued the statement March 30, sending it to Woburn Patch on Friday, April 6. The following is Calloway Labs statement, as provided to Woburn Patch, in its entirety: Calloway Labs, which provides drug testing services to ensure patient compliance with pain medication regimens and addiction treatment, has reached a settlement agreement with the Commonwealth of Massachusetts and federal government over investigations dating back several years, and the matter has now been terminated. Calloway Labs, founded in 2003, has 500 employees in 42 states. For the past several years, it…
Company ordered to pay $20 million in restitution.
A medical testing company will pay $20 million in restitution after defrauding the state Medicaid program. According to Attorney General Martha Coakley, Calloway Labs was involved in an "elaborate kickback scheme that cost the Massachusetts Medicaid program (MassHealth) millions of dollars for unnecessary urine drug screens." Calloway Laboratories, Inc., its Chief Executive Officer Arthur Levitan and Chief Operating Officer Patrick Cavanaugh, as well as two employees of a sober house were indicted on 42 counts by a Middlesex Grand Jury in July of 2010. According to the indictments and investigation by Coakley's office, the Woburn lab company set up a "kickback scheme involving two straw companies that funneled monetary incentives to …