The U.S. Justice Department announced a $47 million settlement with Health Diagnostic Laboratory, as well as a smaller deal with a second laboratory and additional lawsuits involving fees that labs pay to referring physicians.
As part of the settlement, HDL denied any wrongdoing. “We have taken the step of resolving this matter in order to put these allegations, which stemmed from historical practices once common in the industry, behind us," HDL said in a statement Thursday. "These allegations were made against a number of companies operating in the clinical laboratory industry by individuals who stand to personally profit by making these allegations."
HDL said the settlement will allow the company to avoid "the distraction of what could have been years of uncertainty associated with protracted and expensive litigation."
The government alleged that Richmond, Va.-based HDL paid doctors processing and handling fees between $10 and $17 per referral and often waived patient co-pays and deductibles. The arrangement led those physicians to refer patients for unnecessary tests that were billed to Medicare and other federal healthcare programs, violating the False Claims Act, according to the Justice Department.
The government also announced a $1.5 million settlement involving similar allegations against Singulex of Alameda, Calif. Singulex, which does not admit liability in the agreement, could not be reached for comment.
HDL said in its statement that paying processing and handling fees was a long-standing practice in the diagnostic laboratory industry. HDL stopped making such payments in June 2014 when HHS' Office of Inspector General issued a special fraud alert saying the fees presented "a substantial risk of fraud and abuse under the anti-kickback statute," according to the company.
HDL's blood tests help doctors detect cardiovascular risk by looking at biomarkers.
The Justice Department also announced Thursday that it has intervened in lawsuits making similar allegations against Berkley HeartLab, BlueWave Healthcare Consultants, BlueWave's owners Floyd Calhoun Dent and J. Bradley Johnson, and former HDL CEO Latonya Mallory.
HDL has ended its contract with BlueWave as part of a sales force transition, HDL said.
The lawsuits against HDL were originally brought by four whistle-blowers: Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel. Under the False Claims Act, whistle-blowers are entitled to a portion of whatever money the government is able to recover. The whistle-blowers' share of the money in this case has not yet been determined, according to the Justice Department.