HDL execs, consultants face $600M lawsuit from company trustee

Test tubes

The trustee appointed to manage the liquidation of Health Diagnostics Laboratory (HDL), the bankrupt blood testing lab that orchestrated a widespread kickback scheme, has filed a lawsuit against more than 100 consultants, executives and shareholders seeking more than $600 million in damages.

The lawsuit, filed earlier this month, alleges that former co-founder and former CEO LaTonya Mallory, HDL directors and consultants with BlueWave, a marketing firm that partnered with the lab, “engaged in repeated acts of self-dealing, and willfully and continuously violated the law through interrelated policies,” causing “catastrophic damage to HDL.”

In 2015, HDL agreed to pay $47 million to settle kickback allegations after a government investigation found the company paid physicians $20 for each blood sample. In 2014, the Office of Inspector General issued a fraud alert indicating that laboratory payments to physicians could be considered kickbacks. HDL’s case has prompted ongoing concerns regarding the government’s oversight of laboratories.

In addition to the most recent claims, HDL is still facing lawsuits from Aetna and Cigna, accusing the lab of engaging in fraudulent practices.  

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

The Virginia House has backed a conservative twist on Medicaid expansion, and more news from around the web.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.