Feb 4, 2011 | Compliance, Legal, and Malpractice, Laboratory News, Laboratory Pathology
Quest Diagnostics Incorporated Discloses Facts About Negotiations With Medi-Cal Officials to Resolve Claims Associated with Discounted Medical Laboratory Prices
In California, Quest Diagnostics Incorporated (NYSE: DGX) and several other pathology testing laboratories, including Laboratory Corporation of America (NYSE: LH), have found themselves caught in the twin jaws of a regulatory vice. At issue is the long-standing practice in the state of clinical laboratories offering discounted prices for medical laboratory tests that are less than prices paid by California’s Medi-Cal program.
One jaw of the vice is a high-profile whistleblower lawsuit that was filed in 2005, and unsealed by then-Attorney General Jerry Brown in April 2009. The suit claims that seven clinical laboratory companies violated state law over a 15-year period by charging certain customers less for medical laboratory tests than what the seven lab companies billed Medi-Cal, the state’s Medicaid program. The suit alleges that the Medi-Cal program was overcharged by hundreds of millions of dollars from medical laboratory test claims submitted by the defendant lab companies during this time.
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Sep 29, 2010 | Compliance, Legal, and Malpractice, Laboratory Pathology
Ex-employee of Quest Diagnostics allegedly also breached patient privacy laws
By manufacturing a fake positive clinical pathology laboratory test report for a sexually transmitted disease (STD), a medical laboratory manager in Alton, Illinois, set in motion a series of events that made headlines in St. Louis-area newspapers earlier this year. These actions also generated a lawsuit against clinical laboratory manager Maureen Sackmann and her then-employer, Quest Diagnostics Incorporated (NYSE: DGX).
The story is worthy of the best television soap opera plot—and has plenty of cautionary lessons for all clinical laboratory managers and pathologists. Press accounts of the episode indicate that, while working for Quest Diagnostics in Alton, Illinois, Sackmann noticed that a laboratory test report had been generated for a woman (identified only as Jane Doe) who was dating her ex-boyfriend.
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Sep 20, 2010 | Laboratory News, Laboratory Pathology
Its Laboratory Alliance Lab Outreach Business was Sold in 2003
Back in the mid-1990s, Cincinnati was the location for a multi-hospital clinical laboratory consolidation that was one of the first and biggest of its time. Now, all but one of the original organizing hospitals of The Health Alliance of Greater Cincinnati have gone their separate ways.
The original goal was for the alliance to help its not-for-profit health members compete economically. Now this story may turn out to be a cautionary tale about the perils of alliances where health entities share operations but not governance.
Back in 2003, financial struggles of The Health Alliance contributed to its decision to sell ownership of the outreach business of Alliance Laboratory Services, the consolidated clinical laboratory organization, to LabOne, Inc. LabOne’s ownership of this medical laboratory later passed to Quest Diagnostics, Incorporated (NYSE: DGX) when LabOne was itself acquired by Quest Diagnostics in 2005. (See The Dark Report, August 22, 2005, “Quest Pays $934 Million In Acquisition of LabOne.”)
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Sep 15, 2010 | Laboratory News, Laboratory Pathology
Price of 2.5 times revenue makes this a high price for a clinical laboratory
Monday, Laboratory Corporation of America (NYSE: LH) agreed to purchase Genzyme Genetics Corp’s. (NASDAQ: GENZ) fetal genetics and oncology testing division for $925 million in cash. Genzyme has shopped its neo-natal genetic testing business since last year.
LabCorp is paying a purchase price that is 2.5 times Genzyme’s $371 million in annual revenue. This is one of the highest prices paid for a clinical pathology laboratory company since Quest Diagnostics Incorporated (NYSE: DGX), paid about 2.5 times revenue for Ameripath, Inc. in March 2007. In that transaction, Quest Diagnostics paid about $2 billion for Ameripath, which had annual revenues approaching $800 million at the time of sale.
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Sep 7, 2010 | Laboratory News, Laboratory Pathology, Uncategorized
It’s the second new hospital laboratory joint venture for PAML in past eight days
Earlier today, PAML and Centura Health of Denver, Colorado, announced the creation of a new clinical pathology laboratory company. It will be called “Colorado Laboratory Services” (CLS) and will operate as an LLC (limited liability company). CLS represents the second major hospital laboratory outreach joint venture for PAML in the past eight days.
Centura Health is Colorado’s largest integrated health system. It owns 13 hospitals and its flagship is 593-bed St. Anthony Central Hospital in Denver. Its hospitals are strategically located throughout the Denver metropolitan area and will provide CLS with a local presence to serve physicians’ offices located around each of these medical campuses.
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