NEW YORK (GenomeWeb) – The US Department of Justice said Friday that Quest Diagnostics has agreed to pay $6 million to resolve a lawsuit that the government had filed against Berkeley HeartLab — a company Quest acquired in 2011 — alleging that the firm bribed doctors and patients.
Specifically, the lawsuit claimed that Berkeley violated the False Claims Act by paying kickbacks to physicians and patients to encourage the use of its blood testing services, and then charging federal healthcare programs for medically unnecessary tests. Quest ended the conduct that gave rise to the settlement, the DOJ said.
According to the government's complaint, Berkeley's alleged kickbacks to referring physicians were disguised as processing and handling fees. The complaint also alleged that Berkeley routinely waived copayments owed by certain patients who were legally required to pay for part of their tests. The government's complaint further alleged that these illegal practices were perpetrated in order to provide an incentive for doctors and patients to choose Berkeley over its competitors, and that they resulted in medically unnecessary cardiovascular tests being charged to government programs.
Quest said in an email today that the settlement relates to a company it is no longer operating. "Soon after discovering BHL's use of paying processing and handling fees, Quest ended the practice. Quest Diagnostics has a network of 2,200 patient service centers as well as in-office phlebotomists that handle specimen processing," the company said.
"Companies that pay kickbacks to referring doctors corrupt those doctors' independence, leaving patients vulnerable to expensive and unnecessary testing," Chad Readler, acting assistant attorney general in the Justice Department's Civil Division, said in a statement.
The lawsuit was initially filed by Michael Mayes under the whistleblower provisions of the False Claims Act. Under the act, private citizens can sue on behalf of the government for false claims and share in any recovery or settlement. The US government partly intervened in this and two related actions on March 31, 2015, and is continuing to pursue claims against the remaining defendants — Latonya Mallory, the former CEO of Health Diagnostics Laboratory, and marketing company BlueWave Healthcare Consultants and its owners, Floyd Calhoun Dent III and Robert Bradford Johnson. Mayes' share of the settlement with Quest has not been determined, the DOJ said.