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After the sale, Durall moved part of the billing operation to Florida, and soon afterward huge reimbursement checks from insurance companies began coming in, some for as much as half a million dollars. "Records showed the money was being paid out for drug screens – toxicology tests on urine samples collected from all over the country. Some of the testing was conducted at Durall's lab, Reliance, in Sunrise, Fla., but everything was billed through Chestatee," Axelrod reports.
Former Chestatee billing clerk Kelly Smallwood told Axelrod that Durall got much higher reimbursement rates by billing through the hospital. Chestatee wasn't his only operation: "Documents show Durall's lab made $67 million billing tests through another rural hospital in Graceville, Fla. A similar deal Durall made with a hospital in northern California has generated more than $31 million in the last eight months. Last year, Durall bought two more rural hospitals in Georgia and Alabama," Axelrod reports.
Patients from all over the country began calling clerk Smallwood soon after Durall bought Chestatee. One was Sonya Hribal of Tyler, Tex. A toxicology billing pro herself, Hribal said Chestatee had been billing her insurance $2,700 a pop for drug tests on her son who was in in a rehabilitation program in Michigan, adding up to nearly $20,000 for mere urinalysis. "I knew what they were doing right from the get go," Hribal told Axelrod. "They were defrauding my insurance company."
Hribal said people should care because insurance companies can increase premiums to avoid losing money on the huge payouts. "They're going to pay for it, you're going to pay for it," she said.
Durall told Axelrod that all the billing at his rural hospitals was done properly. Last month, Anthem, the nation's largest private health insurer, sent a letter to Durall's California hospital alleging $13 million had been improperly billed. The hospital has temporarily suspended its lab program.