Biolabs settle with Justice Department for $50 million in massive kickback lawsuit

Biolabs settle with Justice Department for $50 million in massive kickback lawsuit

The DOJ is now joining in a whistleblower lawsuit in a case against the former CEO of one of the labs involved.

Two cardiac biomarker laboratories have agreed to pay nearly $50 million total on allegations that they paid doctors kickbacks in exchange for sending them blood samples from patients that could be used in testing.

Health Diagnostic Laboratory Inc. will pay $47 million an Singulex Inc. will pay $1.5 million to settle civil allegations filed by the Justice Department, accusing them of billing Medicare for testing that was not medically necessary and paying doctors for patient blood, according to a Wall Street Journal report.

Former HDL chief executive officer Tonya Mallory was named in whistleblower lawsuits, as was BlueWave Healthcare Consultants Inc., a contractor that marketed the blood tests to doctors.

Both companies denied wrongdoing but agreed to sign on to corporate-integrity agreements with the Office of Inspector General in the Department of Health and Human Services, according to the report.

Mallory resigned as the CEO in September after a previous Wall Street Journal article made the allegations that doctors were being paid off.

HDL allegedly paid doctors $20 for each sample of blood they submitted and billed Medicare for hundreds of millions of dollars for performing tests on the samples, which the company claimed was necessary to detect heart disease.

Mallory and BlueWave, HDL’s former sales and marketing contractor, have been excluded from the settlement agreement, and instead the Justice Department will join whistleblowers in lawsuits against them as well as third laboratory company, Berkeley HeartLab Inc., which was acquired by Quest Diagnostics in 2011. Quest said it was disappointed the Justice Department had decided to sue Berkeley, but it was ready to defend the company.

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