Virginia-based Health Diagnostic Laboratory may be testing the delicate waters of the country’s anti-kickback laws, according to the Wall Street Journal.
The fast-growing lab tests for biomarkers that point to heart disease – but its practice of incentivizing physicians to use its diagnostic tests is a touch suspect, the government says.
Until late June, Health Diagnostic Laboratory, or HDL, paid doctors $20 per blood sample they send to the diagnostics company – that is, the WSJ reports, until a June 25 Special Fraud Alert warned that this practice presented “a substantial risk of fraud and abuse under the anti-kickback statute.” The WSJ continues:
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The fraud alert is part of an investigation the health agency’s Office of Inspector General is conducting with the Justice Department into doctor payments by HDL and several other labs specializing in cardiac-biomarker testing, people familiar with the investigation say. The agencies decline to comment.
HDL measures biomarkers predictive of heart disease – an “inclusive and thorough” package of 28 tests it performs on a single vial of blood. The conditions it tests for include cardiovascular disease, heart failure, stroke, diabetes, metabolic syndrome and fatty liver disease. Because of the popularity of these cardiac biomarker tests, the WSJ said HDL receives Medicare payments of $1,000 or for a single patient’s test.
Indeed, HDL’s grown at a rapid clip – founded in 2008, the upstart grew to a diagnostic powerhouse that was churning $383 million in annual revenues by 2013. According to WSJ diligence, looks like 41 percent of that comes from Medicare.
Diagnostics are one of the fastest-growing segments of the life sciences biz – some analysts peg the just molecular diagnostics market to grow to $7.9 billion by 2018. But the question of reimbursement hovers constantly – which tests receive Medicare coverage, and which don’t?
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This smacks of a related story – one in which San Diego’s fast-growing Millennium Laboratories found itself enmeshed in a (still ongoing) grand jury trial. Though Millennium – a urine drug analysis company – remains mum on its revenues, since its own 2008 start it’s expanded into a sprawling complex that employs more than 1,300. And it, too, faced accusations of physician kickbacks and Medicare fraud, according to a 2012 Reuters investigation. Little has been revealed since about the status of the grand jury trial.
The WSJ piece continues:
HDL is cooperating with the investigation, a spokesman says. Its fee fairly compensated doctors for the labor cost of handling blood that went beyond the $3 that Medicare pays for each blood draw, he says.
HDL “rejects any assertion that we have grown and succeeded as a result of anything other than proper business practices,” says Chief Executive Tonya Mallory in a statement, and “has consistently complied with all applicable laws.”
Read the full WSJ story here: