Two health testing labs have come under fire for allegedly bribing doctors to get patient referrals for their programs and for billing Medicare for unnecessary testing. The two laboratories are due to pay a hefty settlement, for being accused of violating the False Claims Act.
The Health Diagnostics Laboratory is due to pay $47 million and Singulex Inc. would pay $1.5 million, in settlement of the allegations. The doctors were said to be awarded $10 and $17 per referral and waived co-pays and deductibles for the patients.
Those were not the only crimes though; the companies are also accused of working with Blue Wave healthcare consultants to offer further incentives to the doctors, for recommending unnecessary tests. However, it is to be kept in mind that nothing has been proven yet and the settlements are in response to the allegations.
The Health Diagnostics Laboratory has also clarified that the agreement was not reached because there have been any liabilities nor was the company involved in any wrong doing.
There were a total of four individuals who filed the case against the two laboratories, one being an MD, but their shares to the settlement are yet to be decided. The government also announced that it is investigating a similar case against Berkeley Heartlab Inc. and Blue Wave HealthCare consultants.
The settlement amount, for the original case, is to be paid by the two companies to Department of Health and Human Services. This would be done in return for a corporate integrity agreement.
However, the agreement does not dictate that the two companies can continue to operate without any check and balance. There would be procedures and reviews put in place to detect and avoid any such malpractices in the future.
Two of the petitioners had also named the ex-CEO, Philippe Goix, of Singulex Inc. and the parent company of Berkley, Quest Diagnostics Inc. are the brains behind this scheme. The government, however, has declined to start an investigation against them.