The problems go way beyond kickbacks. As previously reported (here and in the Wall Street Journal) the US government is conducting an investigation into Health Diagnostic Laboratory, a medical laboratory testing company that has enjoyed explosive growth since its founding in 2008. Previous reports centered on kickbacks given to physicians by the company to encourage greater use of the company’s tests. The new allegations suggest a broader pattern of serious misconduct based on questionable sales, marketing, and billing practices regarding unnecessary testing.
The main new accusation involves HDL’s sales force, who work for an independent but closely related company known as BlueWave Healthcare Consultants Inc. These salesmen persuade physicians and other healthcare providers to order a whole host of unnecessary tests from HDL and, often, from other lab companies as well, including Singulex and Innovative Diagnostic Laboratory (IDL). As the WSJ article explained, kickbacks to physicians occur when the companies give excessive process and handling (P&H) fees instead of the $3 “draw” fee generally allowed by Medicare. My sources inform me that by combining multiple tests from multiple companies these fees can climb to as much as $100 per patient. This is called “stacking.”
To prevent patients and insurers from looking too closely at these practices the company has a policy of rarely if ever requesting co-payments from patients. Therefore the physicians profited from the kickbacks and the company benefited by collecting the portion of the charges which escape scrutiny from insurance companies and Medicare. Both the promotion of unnecessary tests and the refusal to collect co-payments are illegal and unethical, say experts.