Pain Clinics Ordered Unnecessary Urine Drug Tests

By Fred Schulte, Kaiser Health News

A Tennessee-based chain of pain clinics that abruptly shut down last summer faces five whistleblower lawsuits accusing it of defrauding Medicare and other health insurers by billing for hundreds of unnecessary urine drug tests and other dubious health services, newly unsealed court records show.

The federal suits target Tennessee-based Comprehensive Pain Specialists, also known as Anesthesia Services Associates, PLLC, and several of its physician owners. At its peak, CPS ran 60 pain clinics in 12 states, according to the suits, as well as a lucrative urine-testing lab in Brentwood, Tenn. CPS closed with no warning in July, leaving patients in several states distressed and scrambling to find a new source of narcotic pain medicines.

In federal court filings unsealed in Nashville this week, federal prosecutors said they would take over the urine-testing allegations and sue several CPS owners, including co-founding anesthesiologists Peter Kroll and Steven Dickerson. Dickerson is a Republican state senator representing Nashville.

Kroll could not be reached for comment Wednesday. Dickerson did not respond to an email or a phone message left at his legislative office.


It is not clear whether the whistleblowers, who include former CPS doctors and other employees, would pursue several allegations against the company that the federal government declined to join in. CPS, in an unrelated court filing in December, said the company had terminated all of its employees and that debts “greatly exceed its assets.”

Once among the largest pain management groups in the Southeast, CPS crumbled amid financial woes that included nearly a dozen civil suits alleging unpaid debts, and a criminal investigation that ensnared its former chief executive, John Davis. Davis, 41, was convicted this month in federal court in Nashville on health care fraud charges. He is to be sentenced later this year.

CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized its Medicare billings for urine drug tests. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers. One nurse practitioner working at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billings that year, according to Medicare records analyzed by KHN.

Kroll, who also served as CPS’ medical director, said at the time that the tests were justified for patient safety and to reduce chances the pills might be sold on the black market. Kroll billed Medicare $1.8 million for urine tests in 2015, the KHN analysis of Medicare billing records found.

Kroll in an interview with KHN at the time said that he and fellow anesthesiologist Dickerson came up with the idea for the pain clinics over a cup of coffee at a Nashville Starbucks in 2005.

One of the whistleblower suits alleging unnecessary urine tests was first filed under seal in 2016 by Suzanne Alt, a doctor who worked in the company’s pain clinics in Troy, Mo., and Keokuk, Iowa, from May 2014 to March 2015. She alleged CPS doctors were “strongly encouraged to order full-panel urine drug screens on each patient, every time, despite the patient’s history, compliance and risk.”

She also said that the company’s electronic medical records “made it extremely difficult to order anything less than the full panel.” Alt said she was told the Tennessee lab did about 600 of these screens daily. Another whistleblower said he toured the lab with CPS executives and observed an “overpowering and unpleasant smell of urine.” In response, a CPS executive said, “To me, it smells like money,” according to the suit.

“They were making a killing,” said Birmingham, Ala., attorney Don McKenna, who represents Alt in the case.

Another of the whistleblowers, former CPS anesthesiologist Cynthia Niendorff, alleged that the company billed Medicare about $754 for each additional urine test, even though earlier results had come back negative. She said CPS grossed approximately $6 million per month from the urine-testing lab and said about 20% of this amount was suspect, according to the suit.

Mary Butner, a former insurance specialist for CPS in Gallatin, Tenn., alleged that CPS charged some patients $1,500 for a drug test to measure blood levels of medication and $400 for a drug test designed to detect illegal drugs — charges that the suit called “grossly inflated and disproportional to the actual costs.” She also alleged that CPS would fill prescriptions for patients whose drug tests detected the presence of illegal drugs, or showed that they were not taking their medication as directed.

Butner also accused medical director Kroll of approving prescriptions for back braces when it was “clearly medically unnecessary,” including some people who had injuries to a knee or elbow.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

What Are the Odds of Failing a Drug Test?

By Roger Chriss, Columnist

What are the odds that a person who tests positive for an illicit drug is actually using that drug?

That is a vital question in pain management and the opioid crisis, because millions of pain patients undergo drug tests regularly and some are falsely accused of failing them. The answer is not just a matter of looking at the accuracy of the test.

In a simple situation, like a toss of a coin or a roll of a die, computing the probability of an outcome is elementary. Most people realize that a toss of a coin has an equal chance of coming up heads or tails.

But drug testing is not as simple. It is an example of conditional probability. A drug test that is 95% accurate will not find drug users 95% of the time. That is because the test is applied to both drug users and non-users. We have to use a calculation known as Bayes’ Theorem to determine the real probabilities.

Bayes’ Theorem calculates the probability of one event happening given that another event has already happened. In terms of drug testing, this means the probability that a randomly selected person who has a positive test did in fact use that drug.

To perform the calculations, we need to know two things:

  1. The accuracy of the drug test
  2. The “base rate” at which drug use occurs in the population at large.

The accuracy of drug tests varies widely. A 2010 study estimated that drug tests generally produce false-positive results in 5% to 10% of cases and false negatives in 10% to 15% of cases.

Data on the base rate of drug use also varies. The CDC claims as many as 25% of chronic pain patients develop signs of opioid use disorder. However, a Cochrane review found addiction in less than 2% of long-term opioid users.

This gives us four general scenarios to consider when estimating the probability that a chronic pain patient with a positive test result is actually misusing opioids:

Scenario I (25% base rate; 95% accurate drug test):  90%
Scenario II (25% base rate; 90% accurate drug test): 83%
Scenario III (2% base rate; 95% accurate drug test):  29%
Scenario IV (2% base rate; 90% accurate drug test):  17%

With a high base rate of opioid misuse and a more accurate test, the probability is high at 90 percent. On the other hand, as the base rate falls and test accuracy decreases, the probability drops significantly, down to 17 percent. This means that the probability of a person getting a false positive result increases.

The Base Rate Fallacy

Bayes’ Theorem clearly shows that the base rate of drug use has a large effect on the probability that a person will get a false test result. Because clinical decisions and healthcare policy are often based on the results of such tests, knowing the probabilities is vitally important.

The base rate fallacy occurs when a decision is made without taking the real base rate into consideration. As shown above, the upper value of 25% is more than 10 times the lower value of 2 percent, indicating a high degree of uncertainty in the base rate.

Moreover, the base rate is not the same in all locations or across all populations. Drug abuse is known to be higher in some places and among some age groups. The accuracy of drug tests also represents an average, but factors such as biochemical individuality and testing conditions may influence actual performance.

Further, drug testing is not an entirely random process. For instance, prior to prescribing opioid medication, a doctor may perform a risk assessment using an Opioid Risk Tool. A doctor may also have hints that a patient is abusing opioids to motivate testing. In either case, randomness is lost and the base rate shifts.

Conditional probability produces counter-intuitive results, with a high degree of dependence on the base rate -- itself a number that requires constant attention.

The bottom line is that drug testing alone is not foolproof. Clinical judgment by experienced physicians, combined with information such as pharmacy data, pill counts and medical records, will always get better odds than drug testing alone.

Roger Chriss.jpg

Roger Chriss lives with Ehlers Danlos syndrome and is a proud member of the Ehlers-Danlos Society.

Roger is a technical consultant in Washington state, where he specializes in mathematics and research.

The information in this column should not be considered as professional medical advice, diagnosis or treatment. It is for informational purposes only and represents the author’s opinions alone. It does not inherently express or reflect the views, opinions and/or positions of Pain News Network.

New Drug Testing Guideline Warns Against Fraud

By Pat Anson, Editor

A new guideline on the use of drug testing by the American Society of Addiction Medicine (ASAM) warns against expensive and unnecessary tests that have led to “unethical and/or fraudulent activities.”

The ASAM is a professional society that represents over 4,300 physicians and specialists in addiction treatment. Its new guideline – the first attempt to set national standards for clinical drug testing – could also influence primary care providers and pain management specialists who are increasingly testing their patients for opioid misuse.  

"Drug testing is a valuable tool for supporting patients in addiction treatment, and this comprehensive set of recommendations should prove useful to providers in a variety of addiction treatment settings," said Margaret Jarvis, MD, Chair of ASAM's Quality Improvement Council.

The new guideline, developed by an 11-member expert panel, is published in the Journal of Addiction Medicine.

“ASAM is acutely aware that this document will be released in a context where a lack of clarity about the appropriate use of drug testing has led not only to inconsistent clinical practice, but also unethical and/or fraudulent activities,” the guideline says.

“One of the purposes of this document is to clarify appropriate clinical use of drug testing and, in so doing, shine a light on drug-testing practices that are clearly outside of these boundaries. The delineation of appropriate treatment practices will confer multiple benefits; most importantly, it will improve patient care. At the same time, it will reduce waste and fraud.”

Drug testing has grown into a multi-billion dollar industry – what some call “liquid gold” – largely because so many doctors who treat addicts and chronic pain patients require them to submit to urine drug screens. Many experts consider the “point-of-care” immunoassay tests widely used in doctors’ offices unreliable because they often give false negative or false positive results.

Several drug testing laboratories have also paid heavy fines to settle fraud and kickback charges after they bilked Medicare, Medicaid, private insurers, and patients for unnecessary and expensive lab tests. The practice was so egregious that the Department of Health and Human Services issued a Special Fraud Alert in 2014 to warn physicians not to accept any payments, referrals, rent or reimbursements from drug testing companies.

The new ASAM guidelines say drug tests "should be widely used in addiction treatment settings," but warn that negative or positive findings about a patient’s use of drugs do not necessarily mean they have a substance use disorder. A patient who consumes poppy seeds, for example, could have a positive finding for morphine.

“The list of potential sources of false positives is too extensive to list here, but a few noted examples include; cough suppressants resulting in positive opioid results, ephedrine in cold medicine resulting in positive result for amphetamines, and antidepressants resulting in positive opioid results,” the guideline says.

“There are known limitations to urine immunoassays for opiate use and providers should be cautious when interpreting their results. Providers should carefully review the testing report produced by the laboratory to ensure they understand which opiates and opioids a test is capable of detecting.”

The ASAM’s expert panel said there was no “magic formula” to determine how often a patient should be drug tested. Testing should be done at least weekly at the beginning of addiction treatment, according to the guideline, and at least monthly in patients in stable recovery. Testing should be performed on a random schedule, when possible.

The guideline also cautions physicians not to be confrontational with patients if a test has an unexpected finding.

“Drug testing should function as a therapeutic tool, so a provider's response to test results should not be confrontational. This approach can perpetuate an ‘us versus them’ mentality that reduces the effectiveness of drug testing to support recovery,” the guideline says.

The ASAM guideline also advises physicians on other issues such as urine tampering, patient confidentiality, practitioner education, and how to select reliable tests and laboratories.

Montana Urine Tests Sent to Bankrupt Drug Lab

By Pat Anson, Editor

Imagine getting an unexpected medical bill for over $1,500 that your insurance won’t cover. You can’t afford to pay it, have already missed several weeks of work due to chronic back pain, and you’re worried about losing your job.

That’s the dilemma faced by a Montana woman, one of the patients at a Great Falls pain clinic who are getting unusually large bills for urine drug testing at a laboratory over 2,000 miles away in Georgia. 

“I spoke to my insurance about it and they told me that there are labs in Montana that could have done the same thing and would have been covered by my insurance. She asked me, why they would go to a Georgia lab?” said the patient, who asked that we not reveal her identity.

The lab in question is Confirmatrix Laboratory, a financially troubled company near Atlanta that specializes in urine drug testing.

For the last two years, Confirmatrix has conducted drug screens for the Benefis Pain Management Center, which is part of Benefis Health System, a non-profit community-based health organization that operates a hospital and provides other medical services in Great Falls.

As PNN has reported, some current and former patients at the Benefis pain clinic believe they are being unfairly labeled and treated as addicts. Many are having their opioid doses reduced or stopped completely. All are required to take regular drug tests to prove they’re not abusing their pain medication.

“For the safety of our patients, regular urine drug screens are conducted to ensure the appropriate levels of prescribed medications, and only those medications, are present,” says Katrina Lewis, MD, a pain management specialist at Benefis.  “Presence of too high of a level of opioids or other substances in the urine can make it inappropriate and unsafe to continue prescribing opioids.  Presence of none of the prescribed opioids in the urine indicates the care plan is not being followed and further prescribing is medically unnecessary.”

Urine drug testing is not uncommon at pain clinics, but the selection of Confirmatrix is. The company was founded by Khalid Satary, a convicted felon and Palestinian national that the federal government has been trying to deport for years.

Satary was arrested in 2001 and served more than three years in federal prison after pleading guilty to running a counterfeit CD operation in the Atlanta area valued at $50 million. At the time, it was the largest counterfeit music case in U.S. history, according to the Atlanta Journal Constitution.

Khalid and jordan satary (instagram photo)

Khalid and jordan satary (instagram photo)

Shortly after his release from prison, Satary founded Confirmatrix, Nue Medical Consulting and GNOS Medical, a medical billing firm, and then transferred his interests in the companies over to his son Jordan, a recent high school graduate.

The Journal Constitution reported in 2014 that Satary was subject to a federal deportation order, but immigration officials were unable to find a country willing to accept him. He still apparently lives in the U.S.

On November 2nd of last year, the FBI and the Georgia Department of Health and Human Services served search warrants at Confirmatrix and GNOS Medical, and agents removed documents from both facilities.

The agencies have not said what prompted the raids and no charges have been filed against either company.

Just two days after the search warrants were served, Confirmatrix filed for Chapter 11 federal bankruptcy protection, with Satary’s son Jordan the largest shareholder to sign the petition in the Northern District Court of Georgia. GNOS Medical is listed as one of the creditors that Confirmatrix owes money to.

“Although historically very profitable,” Confirmatrix CEO Ann Durham told the court the company “began experiencing financial troubles when recent changes to Medicare’s reimbursement rates resulted in a decrease (in) revenue from its toxicology business.”

Drug testing has indeed been a very profitable business for Confirmatrix and other drug labs. A 2013 study by the Centers for Medicare and Medicaid Services (CMS) listed Confirmatrix as the most expensive drug lab in the country, collecting an average of $2,406 from Medicare for each patient tested, compared to the national average of $751. The bills from Confirmatrix were high because the company ran an average of nearly 120 different drug screens on each patient, far more than any other drug lab.

These and other abusive billing practices, not only by Confirmatrix but other drug labs such as Millennium Health, finally caused Medicare to lower its reimbursement rates for drug testing.

Millennium filed for Chapter 11 bankruptcy in 2015, soon after paying a $256 million dollar fine to settle fraud and kickback charges, and to reimburse the government for unnecessary urine and genetic tests.

Under its Chapter 11 filing, Confirmatrix is still able to conduct business and perform lab tests, but it is exploring options for a possible sale of the company or a restructuring “to focus its operations on the blood testing business.” 

The company said it has 152 employees in 15 different states, including one employee in Montana who apparently works at the Benefis pain clinic in Great Falls.

All about the Benjamins.jpg

“They had a gal who was there every day, I assume working there full time, and she was responsible for collecting the samples, processing them, and shipping them off to the lab,” said Rodney Lutes, a physician assistant who was discharged by Benefis in March. 

Benefis did not respond to inquiries from PNN about whether a Confirmatrix employee works at the pain clinic or if Benefis receives a commission or compensation from Confirmatrix for doing business with the company. According to clinic policy, patients on high doses of opioids "should have a minimum of one urine drug test every two months."

In a statement, a Benefis official said Confirmatrix performs a valuable service and “waives many costs.”

“The company we have partnered with has an extensive patient assistance program, which is part of the reason they were selected. That company was selected two years ago because it was one of the few labs nationwide that offered quantitative and qualitative testing AND patient assistant programs. This company does not send its patients to collections for an inability to pay a bill,” said Kathy Hill, Chief Operating Officer at Benefis Medical Group.

But some Benefis patients are getting letters from collection agencies demanding payment for Confirmatrix drug screens that cost well over $1,000, the same tests that Medicare is charged about $150 for under its new reimbursement rates. A call to Confirmatrix for comment was not returned.

Other patients say they are getting bills for drug tests they’ve already paid for, and that Benefis has lost some of their billing and medical records. Still other patients are surprised to learn they may be legally responsible for drug tests that their insurance company refused to pay for.  

“Confirmatrix is out of network, hence I am stuck with the bill unless Benefis writes it off,” said one woman, a chronic pain sufferer for over 30 years, whose opioid dose was recently reduced substantially. “In the last 6 weeks I have been dropped to one third of the dosage I was on with intentions that I will be dropped even more. I have no desire to live, because this is not living.”

In April, a suicidal patient at Benefis Health System burned down his doctor's home and killed himself during a standoff with police. David Herron was not a patient at the Benefis pain clinic, but suffered from chronic back pain and apparently had a long-standing grievance with his doctor, an orthopedic surgeon.

The incident prompted Benefis to upgrade security procedures at its facilities, including training employees to handle active shooter situations, according to the Great Falls Tribune, which reported that "danger presents itself in the form of patients who are drug addicted looking for an early prescription."

New Saliva Drug Test for Pain Patients

By Pat Anson, Editor

A Denver-based drug testing company has developed a new saliva test to help doctors determine if their pain patients are taking opioid medications appropriately.

Cordant Health Solutions says its Comprehensive Oral fluid Rx Evaluation (CORE) test is more accurate than the point-of-care (POC) urine tests that are widely used by doctors to test patients for prescribed medications, as well as illegal drugs.

Urine tests only tell a doctor if a drug is present, not if the patient is taking the right amount of medication. As PNN has reported, studies have also shown the urine tests often give false results for drugs like marijuana, oxycodone and methadone.

“Urine screening methods are subject to false positive and false negatives. If somebody for instance is taking a cold medication, they could very easily test positive for amphetamines,” said Richard Stripp, PhD, Chief Scientific Officer for Cordant. “The CORE test is specific for the drug that’s in the blood at the time the oral fluid (saliva) is collected.

“And not only will it tell you whether the drug is there or not, it will tell you whether it’s there at a level that consistent with what was prescribed.”

If a prescribed drug is found in saliva, the CORE test will tell whether it’s within an expected range, or at a level that’s above or below it – an indication the patient is taking too much or too little medication. Stripp admits the test is not foolproof. About 25 percent of the time, he says drug levels detected in saliva don’t match what is found in the patient’s blood.

“There are always things that you have to consider when you are interpreting results. I often say this does not replace the clinical judgement of the physician. This is a tool to help them make better decisions,” Stripp told PNN.

“If a doctor says (a patient is) out of range, I’m kicking them out of my practice, we would never, ever suggest that should be the case. Basically, it’s time to have a conversation with a patient and maybe it requires further monitoring.”

Unlike urine samples, which are usually collected privately in a bathroom and can be swapped or altered with “clean” urine from someone else, a saliva sample for the CORE test can be collected directly from a patient’s mouth with a simple swab.  

One disadvantage of the CORE test is that the results are not immediately available, as they are with POC tests that utilize color-coded “dipsticks” that quickly change color when a drug is detected.

The saliva samples need to be shipped to a Cordant laboratory for testing and the results generally won’t be available for 48 to 72 hours. Currently the CORE test can be used to detect levels of oxycodone, hydrocodone, morphine, oxymorphone, hydromorphone, tramadol and fentanyl.

Patients Penalized After Failed Test

Laboratory testing is far more accurate than POC tests, but some doctors don’t bother ordering confirmatory lab tests if something suspicious is found in a patient’s urine. We hear regularly from readers who say their doctor became suspicious or even “fired” them after a POC test turned up something unexpected.

“Last week they had me come in to take a urine sample. A week later they called and said I failed because they found no drugs in my sample,” said one man who has been taking hydrocodone for nearly 30 years.

“The doctor now tells me they can't approve any more refills. I thought they were joking. They also told me that no one in the area could either. It's crazy and I don't know what to do. I tried not taking pain meds and nearly went insane from the sleepless nights.”

A woman who takes Percocet for her fibromyalgia pain wrote to us saying two urine tests failed to detect any opiates in her system.

“My physician of 14 years immediately interrogated me about compliance and asked if I was giving it away,” she said. “Based on the negative findings, he said he could not prescribe me any further narcotic pain relief.

“I have no idea how I will manage my pain now. This has turned into an insane circus. I feel betrayed by my physician, and the doctor-patient relationship has had its trust destroyed.”

Stripp says he cautions doctors not to jump to conclusions after a failed test.

“If you don’t do the laboratory confirmation test, from a legal perspective you can’t say with reasonable certainty that the test actually contains or doesn’t contain the material it was tested for,” he said.

“You never want to accuse a patient of aberrant behavior if you have an inconsistent result, because there are other reasons why you could have inconsistent results. It could be there are differences in metabolism or they could have a health issue that may be causing the problem. Or there may be a drug interaction.”

Another reader who is on probation was given a urine test that showed he was positive for fentanyl.

"After a nightmare trying to keep myself out of jail, they allowed me to go to a hospital for another urine and blood tests. Both came back 100% negative! The second tests were taken an hour after the first," he wrote. "The judge accepted the hospitals tests and I am free, but this should not be happening."

The CDC’s opioid prescribing guidelines encourage doctors to conduct urine tests on patients before starting opioid therapy and at least once a year afterward. But they explicitly warn against dropping a patient after a failed test.

 "Clinicians should not dismiss patients from care based on a urine drug test result because this could constitute patient abandonment and could have adverse consequences for patient safety, potentially including the patient obtaining opioids from alternative sources," the guidelines state.

How common is patient abandonment? In a recent survey by Pain News Network and the International Pain Foundation, 20 percent of doctors and healthcare providers said they had discharged a patient who failed a drug test in the past year.  And about 4 percent of the patients surveyed said they had been fired by a doctor over a failed test.

Millennium Wins FDA Contract Despite Fraud Charges

By Pat Anson, Editor

Just days after agreeing to pay $256 million to the federal government to settle fraud and kickback charges, Millennium Health has been selected to provide urine drug tests to the Food and Drug Administration for a clinical trial.

The trial will assess the development of opioid tolerance in patients taking pain medication with an abuse deterrent formula. Millennium could potentially make $1.6 million under the FDA contract.

"Long term opioid treatment can produce positive outcomes when prescribed and used appropriately, but they also carry risks that must be managed. UDT (urine drug testing) plays a critical role in aiding the clinician in evaluating patient safety. Millennium's selection as a service partner in this important initiative reflects our advanced technical and analytic capabilities and commitment to excellence," said Millennium CEO Brock Hardaway.

Millennium -- the nation’s largest drug testing company -- won the contract soon after it agreed to settle fraud charges under the Federal False Claims Act. Millennium was accused of bilking Medicare, Medicaid and other federal health care programs for a large number of medically unnecessary urine drug and genetic tests. The San Diego based firm was also accused of violating federal kickback laws by providing physicians with free urine “point of care” (POC) test cups if they referred more expensive laboratory testing to Millennium.  

“Millennium allegedly promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.  “A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources.”

Under terms of its settlement with the Department of Justice (DOJ), Millennium will pay $237 million to settle claims for unnecessary urine and genetic tests. Millennium also entered into a corporate integrity agreement with the Department of Health and Human Services, and will pay $19.2 million to the Centers for Medicare and Medicaid Services to resolve issues over its billing practices. The government, in turn, will pay whistleblowers over $30 million for their help in building the case against Millennium.

“Millennium used a variety of schemes to cause physicians, including many of its biggest referrers, to routinely order excessive amounts of UDT (urine drug tests) for all patients (including Medicare and Medicaid patients) regardless of individual patient assessment or need. Millennium’s abusive practices included the use of physician standing order forms to encourage routine, excessive UDT, and the dissemination of false and misleading statements about drug abuse rates and the value of its testing,” the original government complaint said.

"While Millennium may debate some of the merits of the DOJ's allegations, we respect the government's role in health care oversight and enforcement,” said Millennium's Hardaway. “At the end of the day, it was time to bring closure to an investigation that began nearly four years ago. Millennium Health is currently a very different organization than we were in the past. We fully embrace our obligation to both commercial and publicly funded health plans to provide value to the health care system overall and ensure that doctors who order our testing solutions adequately demonstrate that those solutions are clinically necessary.”

After the settlement was reached, Moody's Investors Service downgraded Millennium's Health's corporate debt rating and said its rating outlook was negative.

"The downgrade reflects Moody's expectation that Millennium will complete a distressed debt exchange or file for Chapter 11 bankruptcy in the near term. Moody's is estimating that lenders will suffer material losses in the event of a default," Moody's said in a statement.

Millennium is not the first drug testing company to face fraud and kickback charges. Competitors Amertiox, Calloway Labs, Quest Diagnostics, and LabCorp have all faced similar charges and paid millions of dollars in fines.As a result of these cases, Medicare has proposed lowering its billing rates for diagnostic testing as early as 2016, moving to a flat-rate fee structure to prevent drug-testing companies from charging more by testing for more substances.

As Pain News Network has reported, urine drug testing grew into a lucrative $4 billion industry – what some call “liquid gold” – largely because so many doctors who treat addicts and chronic pain patients require them to submit to urine drug screens. In many cases, point-of-care tests are used, even though many experts consider them unreliable.