Two Health Labs Settle False Claims Act Dispute for $48.5 million

Health Diagnostics Laboratory pays $48 milllion in False Claims Act dispute
In a blog post for the popular website KevinMD.com, physician Anees Chagpar summarizes the most enduring problem with America’s healthcare system, “We [the United States] spend more per capita than any other nation on Earth, and yet the Organization for Economic Cooperation and Development (OECD) and the Commonwealth Fund find the U.S. lagging in terms of access, quality, efficiency, and equity of care.” This information thus establishes a dichotomy: the U.S. spends more than other nations but is among the worst in terms of healthcare outcomes.

One might then ask, why does America experience such poor results? Part of the problem, Dr. Chagpar argues, as well as many of her colleagues, is the endless barrage of “needless tests.” As she laments toward the end of her post, “We need to stop the madness…we need to practice more rational evidence-based medicine.” Indeed, a study led by physicians at the Mount Sinai Medical Center and the Weill Cornell Medical College in New York, discovered that between unnecessary CT and MRI scans or Pap tests to screen for cervical cancer in teenagers, the U.S. spent approximately $6.8 billion in 2009 alone. And this estimate was deemed “conservative.”

In becoming aware of this problem, the federal government is now aggressively following those who use needless tests to support false claims. In fact, two cardiovascular disease testing laboratories, Health Diagnostics Laboratory (HDL) and Singulex Inc., have now agreed to pay a combined $48.5 million to settle claims the company paid doctors for unnecessary medical testing after four whistleblowers filed lawsuits against the companies on behalf of the government. Though HDL must come up with the bulk of this sum ($47 million), both companies have been accused of violating the False Claims Act, an American law that “imposes liability on persons and companies…who defraud governmental programs.”

According to Reuters, physicians were paid between $10 and $17 for each patient who was referred to the companies for blood tests prosecutors argued were unnecessary. To prevent such events from happening again, the companies must also enter specific agreements with the Department of Health and Human Services’ Office of Inspector General.

HDL and Singulex Inc. now join a list of companies that have been prosecuted for health-related fraud under the False Claims Act. In fact, according to Reuters, since January 2009, more than $23.9 billion has been recovered, of which $15.2 billion involved fraud against health care programs administered by the federal government.

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One Response to Two Health Labs Settle False Claims Act Dispute for $48.5 million

  1. Darren says:

    This is the real scam with Medicare…not the users, but the companies bilking the system. This is what should be the lead story with Medicare scams.

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