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Court Dismisses Lawsuit Against Quest, LabCorp

by | Feb 25, 2015

The U.S. District Court for the Eastern District of Virginia has dismissed a whistleblower lawsuit filed against Quest Diagnostics and Laboratory Corporation of America by Hunter Laboratories, saying that Virginia law does not require laboratories to charge Medicaid their lowest rates. The lawsuit, Hunter Labs LLC v. Quest Diagnostics, was originally filed in 2007 but […]

The U.S. District Court for the Eastern District of Virginia has dismissed a whistleblower lawsuit filed against Quest Diagnostics and Laboratory Corporation of America by Hunter Laboratories, saying that Virginia law does not require laboratories to charge Medicaid their lowest rates. The lawsuit, Hunter Labs LLC v. Quest Diagnostics, was originally filed in 2007 but was only recently unsealed. Hunter Labs and former Chief Executive Officer Chris Riedel have pursued complaints against the large national laboratories in several states. Riedel won a settlement against Quest and LabCorp in 2005, claiming they overbilled California’s Medicaid program. The two labs eventually settled the suit for a combined $290.5 million. Hunter Laboratories is now owned by Bio-Reference Laboratories (Elmwood Park, N.J.). Riedel is now CEO of HunterHeart Inc. In the Virginia case, Hunter alleged that Quest and LabCorp violated the Virginia Fraud Against Taxpayers Act by billing the state Medicaid program at rates above the maximum allowed under Virginia regulations. The relator also alleged that the defendants violated the federal anti-kickback statute (AKS) by offering illegal discounts on rates for private-pay patients in order to “pull through” Medicaid business. In its motion to dismiss, the district court seemingly accepted Quest’s argument that the relator’s allegations were based on regulations that governed the payments from Virginia’s Medicaid program and not the charges that providers bill to Medicaid. The court stated that applicable law does not require laboratories to charge Medicaid their lowest rates and found that the whistleblower failed to identify a specific false claim that the defendants submitted to Medicaid or to show how the defendants’ claims for reimbursement violated Virginia or federal law.

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