BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley has reached a settlement with a clinical laboratory in Springfield after alleging Medicaid fraud.

System Coordinated Services Inc., doing business as Life Laboratories, will reimburse the state Medicaid program $450,000 under the settlement. The settlement comes as a result of an industry-wide investigation by Coakley's Medicaid Fraud Division into urine drug tests billed by independent clinical labs to the state Medicaid program.

"Overbilling the state's Medicaid Program for unnecessary services cheats taxpayers and takes money away from the people that need the funding the most," Coakley said.

"We will continue to work with our state and federal partners to police fraud, waste and abuse of a program that so many people depend on."

The investigation into Life Laboratories revealed that, from 2004-2009, the company and many other independent clinical labs in the state billed Medicaid for urine drug and alcohol tests that were not properly ordered by a doctor or authorized prescriber and were ordered inappropriately for non-medical purposes, including residential sobriety monitoring.

For a provider to be reimbursed for urine drug and alcohol tests by the Massachusetts Medicaid Program, the tests must be ordered for medically necessary purposes by an authorized prescriber.

The investigation also found that Life Laboratories had overcharged the state Medicaid Program for its urine drug and alcohol tests by failing to get its "best price" to the program.

As a result of these violations of state law and Medicaid rules, Life Laboratories was found to have received significant overpayments from Medicaid, Coakley said.

As part of the settlement, in addition to the $450,000 reimbursement to the state Medicaid program, Life Laboratories has agreed to comply with all state laws and Medicaid regulations in the future.