Quest will pay $302M in whistleblower settlement

Testing firm Quest Diagnostics has agreed to pay the federal government $302 million to resolve civil and criminal charges involving a subsidiary closing in 2006, as well as certain diagnostic test kits.

In the criminal part of the proceedings, Quest subsidiary Nichols Institute Diagnostics was accused of intentionally mischaracterizing the performance of a test kit usually used to measure parathyroid hormone levels in dialysis patients. Nichols closed in 2006.

Quest has not conceded liability in the $262 million civil issue involved in the case, in which whistleblower Thomas Cantor alleged that test kits designed by Nichols led labs to submit unreliable results, leading to false claims for reimbursement from the federal government.

In compensation for Cantor's disclosure, he is set to receive $45 million, while $9 million will be paid to several state Medicaid programs. The whole debacle could ultimately cost Quest as much as $314 million when all is said and done, the company told investors at an October meeting.

To learn more about the settlement:
- read this Modern Healthcare piece

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