Welcome to the
Fraud of the Day Website!

Close this search box.

Medically Necessary

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Will Medicare cover it? Roughly 11,000 Americans age into Medicare each day in the United States and the majority of them are asking that very question. Not an unreasonable question since the complexities and limitations of Medicare enrollment and policy changes can be overwhelming for patients and providers alike. For instance, Medicare will pay for urine testing samples if they are medically necessary. But it won’t cover court ordered samples, for purposes of determining compliance with drug court rules. Ronald Coburn is familiar with the limitations of Medicare benefit coverage. Because Coburn owned a urine testing laboratory called LabTox. And he wanted to ensure that all urine tests that his company processed got paid for by Medicare.

 Coburn obtained most of the urine drug samples that his company tested from facilities that provided substance abuse recovery. The programs were typically faith-based or homeless shelters which used drug testing to ensure that participants were drug free. Coburn got the facilities to refer urine samples to LabTox by falsely saying the cost would be covered by Medicaid and Medicare under a blanket order signed by a medical provider.  Not his one and only in this scheme. Coburn then paid a doctor, identified only as Dr. O.J, $1,000 a month for the use of his signature. Dr. O.J. didn’t see the patients, didn’t choose which tests would be performed and didn’t review the results. Coburn took care of that, along with submitting fraudulent bills to Medicare.

Coburn received from his scheme at least $1.5 million each year between 2017 and 2021. Because he had concealed his ownership of LabTox , Coburn thought he could avoid tax returns. But not reporting fraudulently received funds is actually illegal. And the Internal Revenue Service did not disappoint. One September 14, 2023, Coburn was found guilty and agreed to pay restitution of almost $6 million to both Medicare and the IRS.

Shout out to the Internal Revenue Service in this case.

Today’s Fraud of The Day is based on article “Lexington business owner admits health fraud over urine samples, evading income taxes” published by the Lexington Herald Leader on September 14, 2023

The owner of a Lexington laboratory has admitted defrauding taxpayer-funded insurance programs and hiding his business ownership to avoid more than $3.5 million in federal income taxes. Ronald Coburn pleaded guilty this week in federal court in Lexington to one charge of health care fraud and a charge of tax evasion, according to court records.

Coburn owned LabTox LLC, which among other services tested urine drug samples for drugs. Coburn took part in getting payments from Medicaid and Medicare for testing samples that that were not eligible for reimbursement, according to his plea agreement.

Related Articles

Get Your Fraud Fix!

Five days a week wake up to the most current fraud article in your inbox

Contact Us

Thank you for your interest in Fraud of the Day. For more information, please complete the following form.
To receive the most current fraud articles direct to your inbox, click the Subscribe button above.

"*" indicates required fields

Would you like to subscribe to our Blog?
We respect your privacy.
This field is for validation purposes and should be left unchanged.


Fill out the form below to receive the Daily Fraud Highlight, the Weekly Fraud Summary or both. Thank you for your interest in FraudoftheDay.com.

"*" indicates required fields

Subscription Type*
This field is for validation purposes and should be left unchanged.