LabCorp and BioReference Laboratories sued for missing endometrial cancer

gavelMs. Jacquelyn Graulty has filed a lawsuit in Louisiana against LabCorp and BioReference Laboratories in which she alleges the laboratories were negligent in “preparing, testing, reading, reviewing, analyzing, categorizing, reporting, and storing” her Pap smear and histologic slides, and this led to a delay in the diagnosis and treatment of her endometrial cancer.  Ms. Graulty’s former gynecologist and medical practice are also named as defendants.

Factual Allegations

Ms. Graulty originally presented to gynecologist Dr. Susan Jeanfreu at Fleur De Lis OB/GYN Associates on November 11, 2008 with complaints of a “possible bacterial infection”.  Dr. Jeanfreu performed a Pap smear and sent it to LabCorp, which reported “Epithelial cell abnormality, atypical squamous cells of undetermined significance [ASCUS]”.

Approximately one month later, Ms. Graulty returned to Dr. Jeanfreu, who sampled her ectocervix and endocervix, which were also sent to LabCorp. LabCorp identified focal mild dysplasia with HPV-associated change in the ectocervix “not inconsistent” with the patient’s prior ASCUS Pap; the endocervical curettage was unremarkable.

A few days before LabCorp’s report came out, Dr. Jeanfreu performed a colposcopy, and determined Ms. Graulty had Cervical Intraepithelial Neoplasia I (CIN-I).

In September 2009, Ms. Graulty came back to Dr. Jeanfreu complaining of vaginal bleeding.  Dr. Jeanfreu altered Ms. Graulty’s birth control and performed another Pap smear, which LabCorp reported as normal.

In January 2012, Ms. Graulty returned to Dr. Jeanfreu with complaints of vaginal bleeding.  Dr. Jeanfreu again altered Ms. Graulty’s birth control, and performed another Pap smear.  This time the Pap was sent to GenPath, which is owned by BioReference Laboratories; GenPath reported the Pap smear was normal.  A pelvic ultrasound at that time showed diffuse adenomyosis.

Over the next six months Ms. Graulty continued to have vaginal bleeding and returned to Dr. Jeanfreu several times, who reportedly simply altered Ms. Graulty’s birth control regimen.

In July 2013, Ms. Graulty moved to Pennsylvania and started seeing a new gynecologist, Dr. Kerri McIntyre, for her continued vaginal bleeding. Dr. McIntyre discontinued Ms. Graulty’s birth control pills and ordered an ultrasound and lab tests, the results of which are not included in the lawsuit.

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Florida pathologists encouraged to fight UnitedHealthCare and BeaconLBS

FSP logo

The College of American Pathologists and the Florida Society of Pathologists have composed a letter of opposition to the Laboratory Benefit Management Pilot Program (LBMP) created by UnitedHealthCare (UHC) and administered by BeaconLBS that is scheduled to begin on January 1, 2015 in Florida.  I recommend all Florida pathologists sign on to the letter to fight against the implementation of this horrible program.

For those who do not know, BeaconLBS describes itself as follows:

BeaconLBS® is a laboratory benefit solutions company that enables health plans, physicians and network labs to connect and deliver high-quality, cost-effective care to patients. BeaconLBS® is distinctive in its approach, offering a fully integrated, solutions-based technology that automates real-time clinical and financial decision-making at the point of care and point of ordering.

UHC partnered with BeaconLBS, a wholly-owned subsidiary of LabCorp, to create the LBMP, which is supposedly designed to “help improve quality of care and manage appropriate utilization for outpatient laboratory services.”

But instead, I believe it will create a huge amount of unnecessary administrative work for referring physicians, laboratories and pathologists that will render them tremendously inefficient and actually harm patient care.

The LBMP will require referring physicians to notify Beacon if they intend to order any tests that appear on an 80-test list that includes molecular and genetic tests, flow cytometry and essentially all anatomic pathology tests, including simple biopsies, cytology (including Pap smears) and immunohistochemistry.  Two additional tests, BRCA-1 and BRCA-2, will require permission from BeaconLBS before they can be ordered.

Ridiculously, if a referring physician fails to notify Beacon, but the lab to which the test was sent performs the requested test anyway, it is the lab, and not the physician whose responsibility it was to notify Beacon, that will be penalized and not reimbursed for the test it performed. [Read more…]

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 intervene in the suit.


According to the complaint, Elisa Martinez was hired by Quest to work as a phlebotomist at its patient service center (PSC) in Red Bluff California.  She was placed on leave under the Family and Medical Leave Act for undisclosed reasons in February 2011 and was terminated in June 2011.

Just before she advances her allegations, Ms. Martinez highlights the fact Quest paid $302 million in 2009 and Quest and LabCorp paid $241 million and $49.5 million, respectively, in 2011 to settle fraud allegations.

She then provides four examples in which Quest received orders from different physicians to perform the same tests on the same patient and instead of merely sending the results of one set of tests to the ordering physicians, allegedly performed duplicate blood and urine testing and billed Medicare twice.

In one case, Ms. Martinez says a phlebotomist poured urine from one specimen cup into a second cup so as to facilitate the duplicate testing.

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


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.  Participating laboratories must verify Beacon has been notified before performing any of the tests on the 82-test list, or else risk not being reimbursed for the test(s).

In addition, the LBMP:

…mandates essentially all malignant and pre-malignant diagnoses must have a second review in order for the claim to be paid, and in many instances it requires a sub-specialist to perform the second review.

Board-certified anatomic pathologists will no longer be permitted to sign out any malignant cytology or derm cases, or any lymphoma specimens (both nodal and extra nodal), without a second read by a pathologist who is board-certified or board-eligible in that sub-specialty.

In addition, any labs which sign out bone marrow studies must have sub-specialty certification in hematopathology.

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Esoterix Genetic Laboratories sues Qiagen for patent infringement

Esoterix logo

Esoterix Genetic Laboratories has filed a lawsuit against Qiagen, claiming the German company breached a License Agreement signed in 2008 that involves a patent for detecting epidermal growth factor receptor (EGFR) mutations.


In 2008, a British company called DxS Ltd, which was purchased by Qiagen in 2009, signed a License Agreement with Genzyme Corporation.  This agreement allowed DxS to manufacture and sell test kits for detecting EGFR mutations that utilized US Patent No. 7,294,468 (‘468) in exchange for royalty payments.

The ‘468 patent, a “Method to determine responsiveness of cancer to epidermal growth factor receptor targeting treatments”, was originally assigned to The General Hospital Corporation, which does business as Massachusetts General Hospital (MGH), and the Dana Farber Cancer Institute on November 13, 2007.

But pursuant to an agreement announced on May 2, 2005, Genzyme Corporation, and not MGH and Dana Farber, actually had rights to the ‘468 patent.

When LabCorp acquired Genzyme Corporation in December 2010, it created Esoterix to control the assets acquired from Genzyme, which included the rights to the ‘468 patent.

The License Agreement DxS signed (and Qiagen assumed), allowed Qiagen to sell products utilizing the ‘468 patent for non-commercial research only until the entire EGFR test kit gained approval by the Food and Drug Administration (FDA).

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LabCorp suffers setback in Pap test negligence suit


The Court of Appeals for the 11th Circuit has reversed a district court’s ruling in a Pap test negligence suit filed by a woman who claims she developed metastatic cervical cancer due to multiple misreadings of her Pap tests by LabCorp employees.

In its decision, the appellate court noted its disagreement with the district court’s reliance upon the Pap test litigation guidelines put together by the College of American Pathologists (CAP) and the American Society of Cytopathology (ASC).

Case details

I first wrote about this case way back in February 2012, when it was being heard by the district court.

Very briefly, Christina Adams had five Pap tests between January 2006 and September 2008, all of which were sent to LabCorp for interpretation.  Four of those were reported as normal (January 2006, January 2007, March 2008, September 2008), and one (October 2007) was reported as ASC-US.

Ms. Adams was diagnosed with cervical cancer in August 2009.  It is unclear to me based on what I have read whether it was metastatic when she was diagnosed or metastasized later.

She and her husband filed suit against LabCorp in September 2010, alleging it is liable for the negligence of its employees who “misinterpreted and reported inaccurate test results” that “permitted her cancer to metastasize.”

The plaintiffs hired Dr. Dorothy Rosenthal, a pathologist at Johns Hopkins University, as their expert witness.  Dr. Rosenthal performed a non-blinded review of only the Pap tests in question and nothing else and concluded:

…LabCorp’s cytotechnologists’ review of Ms. Adams’s slides fell short of the applicable standard of care by failing to identify abnormal cells that should have been identified.

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$15.8 million award against LabCorp for Pap smear error cut to $4.4 million



A district judge in Florida has reduced the damages a jury ordered LabCorp to pay to the family of a woman who died of cervical cancer from $15.8 million to $4.4 million.

I first wrote about this case back in April, not long after the jury rendered its verdict.  Briefly, 33 year old Darian Wisekal began feeling “ill” in 2007.  A workup in 2008 included a Pap smear, which was reportedly read as negative by a LabCorp cytotechnologist.

Mrs. Wisekal was due to have another Pap smear in 2009, but reportedly on the advice of her physician, she postponed it until the following year.  The Pap smear performed in 2010 was also read as negative by a LabCorp cytotechnologist.

Within a week of the second negative Pap smear, she was hospitalized and diagnosed with cervical cancer, to which she succumbed the following November.

Her family sued LabCorp, claiming it was negligent when its cytotechnologist missed “high grade lesions” that were present on her 2008 pap smear.

LabCorp argued in court documents that it was not negligent, that Mrs. Wisekal’s tumor was “not subject to detection by a pap smear”, and that she was at fault for not “obtain[ing] a pap smear in 2009″.

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LabCorp and UnitedHealthcare to introduce BeaconLBS in Florida


On October 1, 2014, UnitedHealthcare (UHC) will roll out its Laboratory Benefit Management Program in Florida, which will be administered by Beacon Laboratory Benefit Services, Inc. (BeaconLBS), a wholly-owned subsidiary of LabCorp.

According to the “About” page of the BeaconLBS website:

BeaconLBS® is a laboratory benefit solutions company that enables health plans, physicians and network labs to connect and deliver high-quality, cost-effective care to patients. BeaconLBS® is distinctive in its approach, offering a fully integrated, solutions-based technology that automates real-time clinical and financial decision-making at the point of care and point of ordering.

UHC states the Laboratory Benefit Management Program (LBMP) is for now only a pilot program and will only apply to outpatient laboratory services for fully-insured UHC Commercial members.  Currently there are multiple benefit plans that will be excluded.

We have heard of BeaconLBS before

BeaconLBS has been around since at least late 2011, as both Laboratory Economics and The Dark Report reported on it in September and December of 2011, respectively.

At that time, however, it is my understanding BeaconLBS was mainly intended to be limited to managing preauthorizations of “expensive genetic and molecular assays”, as The Dark Report explained.

Not just for expensive tests anymore

BeaconLBS, at least the way UHC is using it, is now an absolute beast that will require referring physicians to provide BeaconLBS with advance notification if they want to order any of the 82 tests specified on pages 10-13 of UHC’s Administrative Protocol.

[Read more…]

LabCorp wrests upstate NY VA contract away from Quest Diagnostics


A federal judge has sided with LabCorp in its post-award bid protest of an upstate New York Veteran’s Administration (VA) contract that had been awarded to Quest Diagnostics.

I originally wrote about this case on June 11th, right after the judge had ruled on whether two declarations from LabCorp experts were admissible.  The judge filed this final decision under seal a few days later, but it only became available to the public on June 23rd.

Briefly, the VA recently awarded a contract to provide laboratory services at five upstate New York VA Hospitals to Quest Diagnostics.  LabCorp, the incumbent contractor, protested, alleging the contract was improperly awarded, as the VA did not evaluate pricing “rationally”.

QuestAfter considering all 2,365 pages of the administrative record as well as all arguments, the judge stated he “has great difficulty accepting the VA’s method of conducting” the award process.

The judge then went on to illustrate six VA actions that were “arbitrary and capricious and lacking a rational basis”:

1)  The VA mainly evaluated bidders on the number of tests they offered in their proposals, but never told the bidders the number of tests they offered would be evaluated at all.

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Quest Diagnostics awarded upstate New York VA contract; LabCorp protests


The Department of Veterans Affairs recently awarded a contract to provide laboratory services at five upstate New York VA Hospitals to Quest Diagnostics.  LabCorp, the incumbent contractor, protested, alleging the contract was improperly awarded and offered two supporting declarations, one of which the judge has just determined is inadmissible.


Unfortunately, many of the documents, including LabCorp’s original complaint as well as pertinent motions and responses, are sealed from public view, so the only information I have is that which is provided in the most recent order.

The VA evaluated bidders based on six factors and sub-factors.  One of those factors was pricing, which apparently held the lowest priority.  Specifically, bidders were asked to submit pricing for 1,575 different tests based on the VA’s estimated utilization for 2014.

At the end of the process, the contract was awarded to Quest.  LabCorp filed its complaint on April 4, 2014 and claimed, among other things, the VA did not evaluate pricing rationally.  In addition, LabCorp alleged the VA used an unstated criterion that took into account how many of the 1,575 tests each bidder offered, which resulted in an “apples to oranges” comparison in which total price was evaluated against a different number of tests for each bidder.

QuestLabCorp submitted a declaration from an outside economist which contained “extensive mathematical analysis” of the pricing proposals, pointed out the flaws in the VA’s evaluation process and offered ways in which it could have been more “rational”.

LabCorp also submitted a declaration from a witness who stated the VA, in 2013, ordered far fewer tests than the 1,575 in the solicitation.

On May 12, 2014, the government filed a motion to strike the declarations, arguing both contained facts and opinions the VA did not consider during the bid evaluation process.

LabCorp countered that the information contained within the economist’s declaration is based solely on data within the (2,365 page!) administrative record and corrects errors the VA made.  It contends the other declaration contains historical information the VA should have used in its evaluation.

Judge’s order

Relying on precedent, the judge stated, in cases of bid protests, the court should focus on the existing administrative record and nothing new, unless omitting the new material would preclude effective review of the existing record.

[Read more…]