Two U.S. Labs Must Cough Up $48 Million for Bilking Medicare

After the Justice Department filed civil allegations against them, two cardiac biomarker laboratories will need to cough up a total of almost $49 million because they paid doctors for patient blood and bilked Medicare out of hundreds of millions of dollars for unnecessary testing, according to the Wall Street Journal.

Health Diagnostic Laboratory Inc. agreed to pay at least $47 million, and Singulex Inc. agreed to pay $1.5 million to settle the matter with the DOJ. Other lawsuits had been filed against Tonya Mallory, HDL’s former chief executive officer, and BlueWave Healthcare Consultants Inc., which pushed HDL and Singulex’s blood tests to doctors.

HDL of Richmond, VA, and Singulex of Alameda, CA, insisted they were innocent but still made corporate-integrity agreements with the Department of Health and Human Services Office of Inspector General.

Last September, the Journal reported HDL making payments to doctors, prompting Mallory to resign. Roughly three weeks ago, the Journal reported that HDL was looking to settle the negotiations out of court.

HDL grabbed the huge amount of money from Medicare by reimbursing doctors $20 for every sample of blood they received. HDL argued that the tests aided their efforts to detect heart disease but terminated their payments to doctors last year after HHS OIG warned of possible violations of the federal anti-kickback statute.

Whistleblower suits that prompted the DOJ investigation named HDL and Singulex as defendants, but the settlement reached allowed the two companies to be removed from liability. Mallory and HDL’s former sales and marketing contractor, BlueWave, though, were not let off the hook by the settlement agreement. The DOJ is still pursuing Mallory and the two owners of BlueWave Healthcare Consultants Inc., Floyd Calhoun Dent and J. Bradley Johnson, along with another target, Berkeley HeartLab Inc., owned by Quest Diagnostics. Quest bought Berkeley in 2011; Berkeley stopped paying doctors soon after that.

The $47 million that HDL must pay may balloon to as much as $100 million in the future, according to RichmondBizSense, if HDL is bought or sells its assets.