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US Labs Face Million Dollar Settlements for Unnecessary Testing

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April 27, 2015

Medical testing labs run by Singulex Inc. and Health Diagnostics Laboratory Inc. (HDL) will pay $48.5 million in settlement fees after accusations they were involved in kickbacks. The labs are accused of enticing doctors with financial reward and unnecessarily testing subjects, according to the US Department of Justice. Neither party was forced to admit any liability. HDL will pay $47 million and Singulex $1.5 million to resolve the allegations.

Health Diagnostics Laboratory and Singulex

HDL provides blood and laboratory analyses, as well as complete health risk assessment administration for chronic disease management programs consistent with nationally accepted protocols. The lab runs more than 200,000 tests every day related to diabetes, hypertension, stress, cholesterol, and obesity. According to the company website, they produce test results utilizing new technologies and biochemical markers to uncover patients’ true health and provide patients with easy-to-interpret reports that show color-coded results.

Singulex is a developer and leading provider of single molecule counting technology for clinical diagnostics and scientific discovery. Their proprietary SMC technology makes it possible for physicians and scientists to detect biomarkers of disease that were previously undetectable. According to the company’s website, their lab testing services are “… transforming patient care from reactive disease treatment to proactive health management and fueling the discovery and development of new therapeutics.”

Both of the labs were accused of being in violation of the False Claims Act when whistleblowers alleged the labs paid physicians for patient referrals and also billed Medicare and other federal healthcare programs for tests that were medically unnecessary.

The claims assert that physicians were paid between $10 and $17 per patient referred to the programs for blood tests. HDL is said to have orchestrated the scam between November 2008 and January 2015, and Singulex between January 2010 and October 2014.

In addition the financial settlement, both companies must participate in programs designed by the Department of Health and Human Services to improve review procedures and prevent conduct such as this in the future.

Settlement Comes as Part of the US Government’s Whistleblower Program

Action was taken against HDL and Singulex after whistleblowers filed lawsuits against the companies. Under the False Claims Act, private citizens have a right to file claims on behalf of the federal government and share in any proceeds recovered. In this case, the amount each of the four whistleblowers will get is yet to be determined.

According to the Department of Justice, the False Claims Act has netted more than $23.9 billion dollars in recoveries since January 2009, which includes just over $15.2 billion regarding fraud against Medicare, Medicaid, and other federal health care programs.

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