WASHINGTON D.C. – Two cardiovascular disease testing laboratories agreed to pay $48.5 million to settle claims of paying physicians kickbacks, officials stated last week.
Also the labs were conducting unnecessary testing, official said.
The cases were brought to light by whistleblowers. They will received a portion of the settlement for doing so.
The laboratories Health Diagnostics Laboratory Inc., of Richmond, Virginia, and Singulex Inc., of Alameda, California, agreed to pay the money to resolve allegations. They admitted violating the False Claims Act by paying money to physicians who referred patients to the laboratories, authorities said.
They were also involved with billing federal health care programs for unnecessary cardiovascular, medical testing, federal officials maintain.
The settlements are related to three whistleblower legal actions brought against the laboratories.
Diagnostics will pay $47 million. Singulex will pay $1.5 million.
“The District of South Carolina has more than doubled its resources allocated to the pursuit of fraud, including matters brought to our attention by whistleblowers,” said U.S. Attorney Bill Nettles of the District of South Carolina. “Whistleblower actions are a critical tool for holding health care providers accountable for fraudulent and abusive practices not only in South Carolina but nationwide.”
The government also took action in the lawsuits as to similar allegations against another laboratory, Berkeley HeartLab Inc.; a marketing company, BlueWave Healthcare Consultants Inc., and its owners, Floyd Calhoun Dent and J. Bradley Johnson; and former CEO Latonya Mallory of HDL.
These are the allegations against the three businesses:
- As alleged in the lawsuits, Diagnostics Laboratories, Singulex and Berkeley induced physicians to refer patients to them for blood tests by paying them processing and handling fees.
- The fees ranged between $10 and $17 per referral.
- The laboratories also waived patient co-pays and deductibles.
- In addition, Diagnostics Laboratory and Singulex allegedly conspired with BlueWave to offer these inducements on behalf of Diagnostics Laboratories and Singulex.
- Physicians allegedly referred patients to Diagnostics Laboratories, Singulex and Berkeley for medically unnecessary tests. They were then billed to federal health care programs, including Medicare.
The Anti-Kickback Statute prohibits offering money for cardiovascular referrals for medical services.
The statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The referral is instead based on the best interests of the patient, according to authorities.
The lawsuits were filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel under the whistleblower, provisions of the False Claims Act.
Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The whistleblowers’ share of these settlements has yet to be determined.
The act allows federal prosecutors to take over a whistleblower suit. Prosecutors advised the court that they would be filing its own complaint against the corporate and individual defendants.
Two of the lawsuits separately allege that the former CEO Phillipe Goix of Singulex and Quest Diagnostics Inc., parent of Berkeley, are liable for the scheme. The government declined to intervene in the allegations against Goix and Quest.