Quest Diagnostics Inc. the world’s largest provider of medical diagnostic tests, agreed to pay $302 million to resolve allegations that its Nichols Institute Diagnostics unit manufactured, marketed and sold misbranded diagnostic test kits, the U.S. government said.
The accord, which the U.S. said is one of the largest recoveries ever in a case involving a medical device, settles federal civil and criminal probes by prosecutors in the office of Brooklyn U.S. Attorney Benton Campbell.
Nichols pleaded guilty to a felony misbranding charge today before U.S. District Judge Sterling Johnson in Brooklyn and agreed to a fine of $40 million, Campbell said.
The kits that were misbranded involved a test used by labs called the Advantage Intact PTH Assay test, which is used to measure parathyroid hormone levels in patients, Campbell’s office said.
Quest also agreed to pay $262 million plus interest to settle federal False Claims Act allegations relating to the test and four others made by Nichols that allegedly provided inaccurate and unreliable results, the U.S. said.
Madison, New Jersey-based Quest also agreed to pay various state Medicaid programs about $6.2 million to resolve similar civil claims.
Quest closed the Nicholas unit in 2006 and hasn’t sold the parathyroid test kits since 2005, Samuels said.
The U.S. began its probe after a whistleblower suit was filed that alleged that the Advantage Intact and another test, the Bio-Intact PTH Assay, produced elevated results, Campbell’s office said.
The tests were used by doctors to determine if patients suffering from conditions such as end-state renal disease were also suffering from hyperparathyroidism, a condition which involves overactivity of the parathyroid glands.
Contrary to Nichols’s claims on inserts and marketing materials, the firm was aware in or about May 2000 that the test wasn’t providing consistent result, Campbell’s office said.
A settlement here, a settlement there, soon it may add up to some real money.
We have posted again and again about legal settlements, sometimes huge, made by prominent health care organizations (see some of them here). In the current case, the US Attorney stated that a prominent corporate provider of diagnostic services failed to reveal that its "test wasn't providing consistent results," and the company itself, or rather, one of its subsidiaries that is now closed down, pleaded guilty to "misbranding."
Despite the outrage that ought to ensue after a diagnostics company admitted it concealed the fact that it knew its tests were inconsistent, and still provided and billed for test results, I suspect that this settlement, like others before, will sink without too many ripples.
Yet this inexorable train of settlements suggests something fundamentally wrong with our health care system. Organizations that provide vital services to patients too often do so dishonestly, putting patient safety at risk. Although physician errors provoke endless headlines and much physician agony, organizational errors of apparently equal import vanish without a trace.
I will note also that in this case, like many others before, only the corporation paid a penalty. The effects of this penalty, paid with fungible money, may be dispersed among shareholders, employees, clients, and/or patients. Yet it is not clear whether anyone directly responsible for the inconsistent test results, and the hiding thereof will pay anything additional.
As long as poor organizational practices, and the cover-up of same, result in no negative consequences for those who are responsible for them, and as long as even discussion of such issues is anechoic, why should such practices and cover-ups stop?
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