I received an email the other day from whistleblower law firm Phillips and Cohen which contained a press release about the $47 million settlement agreement Health Diagnostic Laboratory (HDL) entered into with the Department of Justice to settle allegations it paid kickbacks to physicians. The settlement covers allegations made against HDL in three whistleblower lawsuits, one of which had been filed by Phillips and Cohen.
The PR also notes clinical laboratory Singulex will pay $1.5 million to settle similar allegations, and that the US government decided to intervene against BlueWave Healthcare Consultants, the sales contractor for both HDL and Singulex, and Berkeley HeartLab (BHL).
Soon after I received the email, the Department of Justice put out its own press release on the matter which also included the fact the US government had elected to intervene against Floyd Calhoun (Cal) Dent and Robert Johnson, the owners of BlueWave, as well as Tonya Mallory, former CEO of HDL.
Now that settlements have been reached and decisions to intervene have been made, the original qui tam (whistleblower) complaints have been unsealed and are now publicly available. Those three suits are:
- United States ex rel. Riedel v. Health Diagnostic Laboratory, Inc., et al.
- United States, et al. ex rel. Lutz, et al. v. Health Diagnostic Laboratory, Inc., et al.
- United States ex rel. Mayes v. Berkeley HeartLab Inc., et al.
All of the suits accuse the defendants of paying kickbacks in various forms to induce the referrals of expensive laboratory tests, many of which are medically unnecessary, and describe the ways in which financial inducements altered physicians’ behavior. There are way, way too many allegations in the three complaints, so I will only mention what I feel are the most important and/or interesting tidbits within the individual suits.
Allegations in Lutz complaint
This suit is over 100 pages long, and uses the operations in the office of Lloyd Miller, MD, a South Carolina internist, as the way to tell its story of how the alleged kickback scheme worked, and how the scheme negatively impacted patient care. The relators are the owner of the billing company Dr. Miller used and his nursing supervisor. [Read more…]