Mayo Clinic sues Dr. Franklin Cockerill, Chief Laboratory Officer of Quest Diagnostics

mayo

A couple of weeks ago, I briefly mentioned how Dr. Franklin Cockerill, former chairman of the Mayo Clinic Department of Laboratory Medicine and Pathology (DLMP) and chief of Mayo Medical Laboratories (MML), started his new job as vice president and Chief Laboratory Officer of Quest Diagnostics on October 1, 2014.  On October 14, 2014, the Mayo Clinic filed a civil lawsuit against Dr. Cockerill that alleges, among other things, misappropriation of trade secrets.

Facts/Allegations

The complaint provides a synopsis of Dr. Cockerill’s “critical” role as chairman of the DLMP, which is acknowledged as “one of the most important departments” at the Mayo Clinic, and as the head of MML.  As a result, Dr. Cockerill gained:

…intimate first-hand knowledge of MML’s and DLMP’s most sensitive confidential information concerning short-term and long-term business, marketing, sales, pricing and data management strategies, as well as market assessments and analysis, competitive analysis, test development and launch plans, and related patent protection and litigation analysis.

Dr. Cockerill also:

…has detailed knowledge of tests that MML and DLMP have developed and abandoned and/or not developed, those that have good profit margins and those that don’t…

and

…confidential information about essentially every strategic decision that MML and DLMP has made for the past seven or more years and about every strategic decision facing MML and DLMP in the immediate future.

The complaint then goes on to highlight the Business Confidentiality Policy and Code of Conduct all Mayo Clinic employees are required to follow.  These documents contain a definition of, and a mandate to protect, Mayo’s Confidential Business Information. [Continue reading]

Bostwick Laboratories settles whistleblower suit for $6.05 million

Bostwick Laboratories (BL) has settled the federal qui tam (whistleblower) lawsuit filed by Michael Daugherty of LabMD that alleged False Claims Act violations for $6.048 million.  This settlement does not resolve allegations against Dr. David Bostwick, who is a separate defendant in the case. I first wrote about this case in January 2013, when Senior District Judge Arthur Spiegel denied BL's motion to dismiss, and again in May 2014 to simply provide a quick update on where the case … [Continue reading]

Interview with Dr. Vinay Kumar, editor of Robbins and Cotran Pathologic Basis of Disease

Cover Ninth Edition

Elsevier recently published the ninth edition of Robbins and Cotran Pathologic Basis of Disease.  An account executive with the public relations firm that represents Elsevier reached out and asked if I would be interested in asking Dr. Vinay Kumar, one of the editors of Robbins, a few questions about the book. I have fond memories of reading Robbins (twice, as I recall, with the exception of the eye chapter) during my second year of medical school, as well as referring to it on multiple … [Continue reading]

Quest Diagnostics, LabCorp accused of duplicative testing, billing in recently unsealed suit

A former phlebotomist for Quest Diagnostics filed a qui tam (whistleblower) suit on July 27, 2012, alleging her former employer and LabCorp knowingly submitted "false and fraudulent claims to the United States and the State of California...for the same tests, performed on the same day, on the same patient" since at least 2002.  The suit was unsealed on October 6th, 2014 after a US District judge denied the federal government's motion for a fifth extension of time to consider whether it would … [Continue reading]

Pathology Blawg News Roundup for October 10, 2014

FDA releases draft LDT regulation guidance documents On October 3rd, the Food and Drug Administration released two guidance documents concerning the regulation of laboratory-developed tests (LDTs). The first is entitled "Framework for Regulatory Oversight of Laboratory Developed Tests" and provides: ...guidance to clinical laboratories that manufacture LDTs about how FDA (the Agency) intends to enforce authorities that apply to such laboratories as medical device manufacturers. The second is … [Continue reading]

Owner of Bristol Laboratories indicted for healthcare fraud and kickbacks

Beth Palin, a non-practicing attorney and owner of Bristol Laboratories (BL) and Mountain Empire Medical Care (MEMC), has been indicted by a federal grand jury on charges of healthcare fraud, conspiracy to commit healthcare fraud and offering or paying a kickback.  Palin's husband, Joseph Webb, was indicted on the same charges, and otolaryngologist Dr. Mary Curtiss was indicted on charges of healthcare fraud, conspiracy to commit healthcare fraud and receiving a kickback. Allegations Dr. … [Continue reading]

UnitedHealthcare delays Lab Benefit Management Program; Forensic pathologist Dr. Norman Thiersch resigns

Dr. Norman Thiersch (Herald of Everett Washington)

BeaconLBS Back in July, I talked about UnitedHealthcare's (UHC) Laboratory Benefit Management Program (LBMP) that is to be administered by Beacon Laboratory Benefit Services, Inc. (BeaconLBS), a wholly-owned subsidiary of LabCorp. Readers can refer to my previous post for more specific information, but basically, the LBMP appears to be very cumbersome and will require physicians to notify BeaconLBS before ordering certain laboratory tests, including anatomic pathology. … [Continue reading]

Taking a little break

I have been absolutely knocked flat by a nasty little bug and need to take a few days to convalesce. I will resume posting as soon as I can. … [Continue reading]

Abington Memorial Hospital laboratory accused of Medicare, Medicaid fraud

AMH logo

A former employee of Abington Memorial Hospital (AMH) in Pennsylvania has filed a federal lawsuit that alleges the hospital laboratory committed Medicare and Medicaid fraud and that she was retaliated against and wrongfully terminated after she informed hospital administration of the lab's actions. Background/Allegations Ms. Joanne Cleighton was hired by AMH in February 1988 to work in the registration office.  Two years later she was promoted to supervisor and fourteen years after that she … [Continue reading]

Pathology Blawg News Roundup for September 26, 2014

Health Diagnostic Laboratory CEO resigns Ms. Tonya Mallory, CEO of Health Diagnostic Laboratory (HDL), has officially resigned, reportedly because she wants to help her brother open a new business. HDL first came to my attention a couple of weeks ago after the Wall Street Journal wrote an expose about how the federal government was investigating HDL for possibly paying kickbacks to physicians. Since then, Forbes published an article about HDL that discusses "a broader pattern of serious … [Continue reading]

Quest Diagnostics avoids class action lawsuit for overbilling, fraud

An appellate court has upheld a ruling by a lower court that denied certification of a class action lawsuit against Quest Diagnostics, which was accused of unjust enrichment and state law consumer fraud by overbilling patients for laboratory testing. Background The plaintiffs claimed Quest routinely billed patients more than the amount reported on the Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA). They proposed certification of multiple classes: All persons who were … [Continue reading]

The College of American Pathologists’ House of Delegates: What Does It Do?

  Regular readers of this site know I believe pathologist overutilization of tests and services is a very important issue, from both ethical and economic standpoints.  I was hopeful the issue would be discussed at the recent annual meeting of the College of American Pathologists (CAP), and indeed it was brought up at the House of Delegates. But according to Delegates who attended the meeting, the increasingly lively discussion was abruptly ended by the new Speaker of the House, Dr. … [Continue reading]

American Society for Clinical Pathology 2012-2013 financial information

A couple of weeks ago I posted the publically-disclosed 2012 Form 990 for the College of American Pathologists (CAP), so I suppose it is only fair I do the same for the American Society for Clinical Pathology (ASCP) as well. As before, the information contained in the post is not an exhaustive account of the available information in the ASCP's Form 990, but rather more or less the same data I posted for the CAP. For those interested, the ASCP's entire Form 990 is here. Disclosed … [Continue reading]

Millennium Health sues Pathway Genomics for trade secret violations

Millennium Health logo

Millennium Health (formerly Millennium Laboratories) has filed a lawsuit against Pathway Genomics, its CEO James Plante, and Millennium's former laboratory director Dr. Amadeo Pesce, alleging violation of California's Trade Secrets Act, breach of contract, breach of duty, tortious interference, unfair competition, conversion and unjust enrichment. Allegations Millennium hired Dr. Pesce in December 2007 to "develop and operate a state-of-the-art UDT [urine drug toxicology] lab."  Prior to … [Continue reading]

OIG investigating Health Diagnostic Laboratory for possible kickbacks

HDL logo

The Wall Street Journal is reporting the Office of the Inspector General for the Department of Health and Human Services is investigating Health Diagnostic Laboratory (HDL) for potentially paying illegal kickbacks to referring physicians. HDL, which opened in late 2008, "offers the most comprehensive laboratory test menu of risk factors and biomarkers for cardiovascular and related diseases" according to the company's website.  It generated $383 million in revenue in 2013, 41% of which … [Continue reading]