The U.S. Justice Department announced in a recent release that medical laboratory giant Quest Diagnostics (Quest) has agreed to pay $6 million to resolve kickback claims against one of its laboratories, Berkeley HeathLab (Berkeley) of Alameda, California.

The claims against Berkeley arose in 2011 in a lawsuit initially filed by Dr. Michael Mayes under the qui tam “whistleblower” provisions of the False Claims Act. The government partially intervened in the case. In his suit, Mayes alleged that Berkeley paid kickbacks to physicians in the form of “process and handling fees” to those who agreed to send their patients’ blood tests to the laboratory. In addition, Berkeley paid kickbacks to patients by regularly waiving copayments in a scheme to induce those patients to choose Berkeley over other labs. The government further claimed that the illegal practices encouraged physicians to order medically unnecessary cardiovascular tests that were ultimately paid for by federal healthcare programs.

“This settlement is part of the government’s ongoing efforts to address conduct that allows medical decisions to be influenced by money rather than the best interests of patients,” said U.S. Attorney Channing D. Phillips of the District of Columbia.

“We will not allow laboratories to provide financial incentives to induce physicians to steer patients their way,” added Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) in Atlanta. “The Office of Inspector General will continue to work aggressively to eliminate this type of behavior which ultimately drives up healthcare costs and eliminates fair competition.”

The government’s intervention in the Berkeley matter and a number of other qui tam cases of a similar nature, serves to demonstrate its ongoing and aggressive stance on combating health care fraud. The FisherBroyles Pharmacy and Health Care Law team will continue to track issues of importance, along with notable accounts of fraud and wrongdoing, in the pharmaceutical and health care industries. We welcome your questions. Please contact any of the following attorneys:

Brian E. Dickerson

Anthony Calamunci

Nicole Hughes Waid

Amy Butler

Katy Wane