Two qui tam (whistleblower) lawsuits against Quest Diagnostics and LabCorp filed in Virginia and Georgia have recently been unsealed. The relator in both suits is none other than Chris Riedel, the former owner of Hunter Laboratories.
Mr. Riedel, who just last month sold Hunter Labs to Bio-Reference Laboratories, originally filed the Virginia suit in 2007 and claims both Quest and LabCorp committed Medicaid fraud by charging Virginia Medicaid significantly more for laboratory testing than they charge non-government payors.
The Georgia suit was filed in January 2008 and, according to the Notice of Removal, Mr. Riedel is alleging Quest and LabCorp charged Georgia Medicaid more for lab testing than is allowed under Georgia law, and also provided kickbacks to private payors via deep price discounts so as to effect “pull through” referrals.
I reached out to Quest, LabCorp and an attorney for Hunter Labs, but so far, only Quest responded:
The allegations have been made by Hunter Laboratories, a Quest Diagnostics’ competitor. We believe these allegations lack merit, and our testing services are priced appropriately. We comply with the laws and regulations governing our business, including Medicaid pricing requirements, not only as a legal obligation, but also because it is the right thing to do. As always, Quest Diagnostics remains firmly focused on putting patients first and serving their needs.
Many thanks to the Quest spokesperson for getting back to me and to a reader for providing me with the Georgia Notice of Removal.
I do not know much more about the cases other than what is in the article and in the Georgia Notice of Removal, as the cases were both just moved to federal court, and the complaints are not up on PACER yet. Hopefully they will be available soon.
What I do know, however, is Mr. Riedel feels very strongly that Quest and LabCorp are engaged in business practices that make it very difficult for smaller labs to compete in the marketplace, and he is not afraid to take them to court over it.
Quest and LabCorp agreed to pay $241 million and $49.5 million, respectively, in 2011 to settle a California whistleblower lawsuit filed by Mr. Riedel in 2005 in which he made essentially the same allegations—that the two biggest labs were paying kickbacks to private payors by providing steep discounts in return for referrals and at the same time overcharging Medi-Cal.
He and three other labs in California also filed suit against Quest, BC/BS of California and Aetna in November 2012, alleging a conspiracy to monopolize lab testing and restrain competition in California. A judge dismissed that suit in July 2013, but gave the plaintiffs 45 days to file an amended complaint, which they did on August 9. So that case is still alive at this point.
Including the Georgia and Virginia cases, Mr. Riedel has filed three qui tams against Quest and LabCorp…that we know of.
I am very curious to know if there are any more in other states we don’t know about yet. My guess is there are.
I am going on vacation (my first since I started the blawg) starting tomorrow and will not be posting any new articles until September 23, unless something just absolutely amazing happens. See you then.