A fast-growing Virginia laboratory has collected hundreds of millions of dollars from Medicare while using a strategy that is now under regulatory scrutiny: It paid doctors who sent it patients’ blood for testing.
Health Diagnostic Laboratory Inc. transformed itself from a startup incorporated in late 2008 into a major lab with $383 million in 2013 revenues, 41% of that from Medicare.
It built that business selling tests to measure “biomarkers” that help doctors predict heart disease. HDL bundles together up to 28 tests it performs on a vial of blood, receiving Medicare payments of $1,000 or more for some bundles.
Until late June, HDL paid $20 per blood sample to most doctors ordering its tests—more than other such labs paid. For some physician practices, payments totaled several thousand dollars a week, says a former company employee.
HDL says it stopped those payments after a Special Fraud Alert on June 25 from the Department of Health and Human Services, which warned that such remittances presented “a substantial risk of fraud and abuse under the anti-kickback statute.”