HDL and Singulex labs pay $48.5M to settle doctor's whistleblower case by Phillips & Cohen, other qui tam complaints

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Apr 09, 2015, 07:19 ET

COLUMBIA, S.C., April 9, 2015 /PRNewswire-USNewswire/ -- A South Carolina doctor who had ethical concerns about blood-testing labs paying physicians extra fees allegedly to get their business was one of the leading whistleblowers in a case against two labs that the government announced today has settled for $48.5 million.

The government joined whistleblower claims that Health Diagnostic Laboratory Inc. and Singulex Inc. allegedly had routinely paid doctors, physician groups and hospitals kickbacks between $10 and $17 for each blood test, masked as "process and handling fees," to induce them to order expensive blood tests, many of which were medically unnecessary.

HDL, of Richmond, Virginia, will pay $47 million plus more than $3 million in interest to the government over the next five years for a total of more than $50 million. Singulex Inc., a privately held lab company based in Alameda, California, will pay more than $1.5 million. The settlements cover charges made in a qui tam lawsuit brought by Dr. Michael Mayes and filed by whistleblower law firm Phillips & Cohen, as well as two other qui tam complaints.

"Dr. Mayes was quite concerned when he learned how much those labs were charging government healthcare programs for specialized blood tests," said Peter Chatfield, a whistleblower attorney with Phillips & Cohen in Washington, DC. "It seemed to him, as alleged in his qui tam lawsuit, that the blood tests often were unnecessary, and labs were paying doctors unwarranted fees simply to get more test referrals."

Medicare already pays physicians for the work involved in processing lab specimens as a component of what they pay doctors for office visits.

The government also announced today that it has joined the kickback claims against two other companies named in Dr. Mayes' qui tam complaint. Litigation will continue against Berkeley HeartLab Inc., of Burlingame, California, and BlueWave Healthcare Consultants Inc., of Hanceville, Alabama.

Phillips & Cohen filed the qui tam lawsuit on behalf of Dr. Mayes in federal district court in South Carolina in 2011.

Dr. Mayes and his attorneys thanked US Attorney Bill Nettles for the District of South Carolina, Assistant US Attorney James C. Leventis Jr. and Trial Attorney Elizabeth Strawn of the Department of Justice Civil Division for their efforts that resulted in today's settlements and for their continued work to recover funds for taxpayers in the remaining cases.

Bill Coates of Roe Cassidy Coates & Price P.A.in Greenville, SC, was local counsel for Dr. Mayes.

About Phillips & Cohen LLP
Phillips & Cohen (www.phillipsandcohen.com) is the nation's most successful law firm representing whistleblowers, with recoveries for government totaling more than $11.6 billion in civil settlements and criminal fines. Phillips & Cohen and its attorneys have been recognized by Lawdragon ("500 Leading Lawyers in America"), the National Law Journal ("Plaintiffs' Hot List") and many other publications for its work on whistleblower cases.

SOURCE Phillips & Cohen LLP