Two Testing Labs Agree to Settle False Claims Act Suits
The Justice Department announced that two cardiovascular testing laboratories, Health Diagnostics Laboratory, Inc. (“HDL”) and Singulex, Inc. have agreed to settle allegations that they violated the Anti-Kickback Stature and the False Claims Act. HDL and Singulex will pay $47 million and $1.5 million, respectively.
According to its website, HDL, based in Richmond, Virginia, offers tests for the biomarkers that can indicate risk for cardiovascular disease, diabetes, and related diseases. It has testing locations in Virginia, Colorado, Tennessee, and Texas.
Singulex is based in Alameda, California. According to its website, it developed single molecule counting (SMC™) technology for clinical diagnostics and scientific discovery.
According to the Justice Department, three separate qui tam lawsuits were filed by whistleblowers alleging that the settling parties, HDL and Singulex, as well as others, paid illegal remuneration to physicians and hospitals in return for patient referrals. The whistleblowers, Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel, alleged that the laboratories paid physicians groups and hospitals “process and handling fees” of between $10 and $17 for every patient that was referred to them for the blood tests. In addition, the whistleblowers claimed that HDL and Singulex routinely waived patient co-pays and deductibles.
According to the whistleblowers, this remuneration was paid in violation of the Anti-Kickback Statute. Under the Anti-Kickback Statute, it is illegal to solicit, receive, offer or pay remuneration (monetary or otherwise) in exchange for referring patients to receive certain services that are paid for by the government.
According to the qui tam complaints, many of the expensive specialty blood tests were medically unnecessary and the submission of claims to Medicare or other government healthcare programs for payment were false claims made in violation of the False Claims Act.
The whistleblowers also named other defendants in the qui tam suits: to wit, Berkeley HeartLab, Inc., BlueWave Healthcare Consultants, Inc., Floyd Calhoun Dent, J. Bradley Johnson, and Latonya Mallory. The government announced that it has intervened as to those other defendants and those portions of the whistleblowers’ complaints remain pending.
The whistleblowers will receive a portion of the proceeds from the settlements with HDL and Singulex as their rewards under the qui tam provisions of the False Claims Act.