Not only is there big money in drugs, but there is big money in drug testing, as evidenced by a recent jury verdict against San Diego, CA based Millennium Laboratories Inc.
The jury verdict handed down June 16 resolves three cases dating back to 2011 that were consolidated before the U.S. District Court in Tampa, Florida, and brings to an end all litigation between the rival drug-testing companies Millennium and Ameritox Ltd., based in Baltimore, MD.
The jury ordered Millennium to pay $2,755,000 in compensatory damages and an additional $12 million in punitive damages to Ameritox for violating federal anti-kickback statutes with a program that provided physicians with free point-of-care specimen cups in exchange for referrals.
The 2011 complaint by Ameritox alleged that Millennium marketed a “revenue-based billing model” promoting drug testing as a way to increase income for physician practices. An exhibit attached to the complaint − purportedly Millennium marketing materials − claims a doctor can make $45,021 a year performing a single drug test per day, $225,108 a year performing five tests per day and $900,423 performing 20 tests per day.
The company further claimed that Millennium provided point-of-care testing cups for free or at prices below market rates on the condition that the providers agreed not to bill for the use of the cup, used it only for an initial urine screening and sent the specimen to Millennium for confirmation testing.
The jury determined the cup program, which Millennium says it has discontinued, constitutes remuneration under the federal Stark Law, which took effect in 1992, and prohibits physicians from referring patients to companies with which they have a financial interest.
|Bowzer doesn't pee in cups.|
The jury also found that Millennium tortiously interfered with Ameritox's business relationships and engaged in unfair competition in Florida, awarding it $1.625 million in compensatory damages and $7.08 million in punitive damages, interfered with business relationships in Texas and Tennessee, awarding $575,000 in compensatory damages and $2.52 million in punitive damages for Texas, and $555,000 in compensatory damages and $2.4 million in punitive damages for Tennessee.
Inversely, the jury rejected Millennium’s counterclaims that Ameritox interfered with its business in California, Florida, New York, Oregon, Tennessee, Texas and Washington, and rejected Millennium's allegations that Ameritox violated the Stark law.
Millennium failed to prove that Ameritox:
- Assigned specimen collectors to physician offices to perform receptionist and other clerical duties unrelated to drug testing in exchange for referrals;
- Provided below fair market prices for point-of-care test cups for testing that the doctor can bill for in exchange for referrals;
- Entered into lease agreements with doctors that were not at commercial reasonable rates in exchange for referrals;
- or provided non-monetary compensation to physicians such as paying for Christmas parties and giving gift cards in exchange for referrals.
Though Millennium is asking for a new trial on the grounds that Ameritox was improperly allowed to introduce inflammatory evidence to the jury, the fact that this litigation continues demonstrates the huge margins that drug testing must produce, and the cost of such aggressive tactics on health systems, in particular workers' compensation.
The California Workers’ Compensation Institute reported that carriers and self-insureds paid $98 million for drug testing in 2011, 192 times the $509,000 paid in 2004.
Lon Wagner, a spokesman for Ameritox, told WorkCompCentral, “What we were looking for is a level playing field, and we feel this is a first step toward achieving that.”
How about leveling the field for the consumers, the people that pay for this nonsense? Drug testing may have its place in certain situations, but the incentives these companies throw at providers of care to initiate services is offensive to me, and should be to you.
And such tactics are not isolated - my bet is that these are, unfortunately, normal tactics within the medical supply industry across nearly all medical fields.
Physicians in workers' compensation in particular are vulnerable to such marketing and sales tactics because the actual fees paid to doctors have become increasingly restrictive, and the amount of time bills remain unpaid lengthens, creating impetus for revenue enhancement opportunities.
Some docs of course are unscrupulous and would engage in such revenue enhancement programs regardless, but the motivation for doing so increases the more actual fees for services that provide value to workers' compensation claimants are constricted.
Maybe Millennium and Ameritox are a bit more level now, but when it comes to those of us who actually pay the bills at the end of the day, the case is just one more example of end point consumer gouging.
While medical guidelines recommend drug testing for compliance purposes and to help ensure that drugs aren't being diverted to the black market, we know those are specific case recommendations particular to a certain set of medical facts, not to be applied universally.
But the way medical suppliers stimulate sales with physician gifting and revenue enhancement programs tests the ethical and moral qualities of the individuals on the front lines, and physicians should not be placed in those positions, and we should not be placed into positions of having to pay for it.
Sometimes drug testing is warranted. Most of the time it is not.
I'm sick of it. You should be too. Then we can all go to the doctor, get our drugs, and pee in cups (unlike Bowzer) so we're all in this together...