Health Diagnostic Laboratory (HDL) is pushing back at allegations that the company violated antikickback law by paying doctors for ordering blood tests, a couple of months after the lab giant said it would shell out $47 million to settle claims filed by the Justice Department over payments to physicians and Medicare billing.
As The Wall Street Journal reports, last year HDL paid $20 per blood sample to most doctors ordering its heart disease detection tests, well and above what similar labs gave physicians. The Richmond, VA-based company stopped the payments after the Department of Health and Human Services issued a Special Fraud Alert last June, warning companies that the payments showed "a substantial risk of fraud and abuse under the anti-kickback statute," according to documents seen by the WSJ. The alert is part of the health agency and Justice Department's probe into doctor payments by HDL and other labs.
But while HDL is cooperating with the investigation, it is still defending the fee it paid to physicians, saying it fairly compensated doctors for handling blood beyond the $3 that Medicare pays for each blood draw, the company told the WSJ. HDL "rejects any assertion that we have grown and succeeded as a result of anything other than proper business practices" and "has consistently complied with all applicable laws," former CEO Tonya Mallory said in a statement seen by the newspaper. And the company is pointing to the clinical utility of its tests, saying detecting disease earlier with its tools "is far less expensive, in both human and financial terms," than treating heart attacks or strokes further down the line, an HDL spokesman told the newspaper.
Still, former HDL employees and the company's own numbers are shedding light on potentially questionable tactics. The company paid some physician practices more than $4,000 a week in blood-sample fees, a former HDL marketing manager whose duties included sending doctors checks told the WSJ. And HDL's Medicare receipts rose to $157 million in 2013 from $139 million in 2012, according to company documents seen by the newspaper. The company's payments to doctors exceeded $17 million in 2013 alone.
Other labs under investigation by the DOJ are also cooperating with the probe, with companies such as Singulex, Boston Heart Diagnostics and Atherotech saying they halted payments to physicians after the June 25 alert. But Singulex is singing a similar tune to HDL, maintaining that its fees were "a long-standing industrywide practice" before the "government clarified their view," the company told the WSJ.
Meanwhile, Mallory is facing more legal pushback months after resigning from HDL. The former CEO was recently named as a defendant in a whistleblower suit targeting companies' questionable payments to doctors and billing practices. The case alleges that Mallory personally signed payment checks to doctors and "was directly involved in HDL's scheme to provide cash remuneration to referring physicians," according to a Richmond Bizsense blog post.
- read the WSJ story (sub. req.)
- here's the Richmond Bizsense blog post