Biodiagnostic Laboratory Services Lawyers
On or about June 25, 2009 Horizon Blue Cross Blue Shield of New Jersey (“Horizon”) filed a complaint in the Superior Court of New Jersey against Biodiagnostic Laboratory Services, LLC, (“BLS”) it principals, John Does 1-100, ABC Corporations 1-100. The John Does and ABC Corporations are named as unknown defendants and specifically include physicians and physician practice entities that may have engaged in certain activities with BLS.
Horizon is bringing this action against BLS and its principals to recover in excess of Fourteen Million Dollars ($14,000,000.00) that Horizon paid to BLS in fraudulent health insurance claims and to enjoin the unlawful practices that allowed BLS to perpetrate what is alleged to be a massive fraud.
Horizon alleges that beginning in 2005, BLS misrepresented its actual charges for services, double-billed for the same services, paid physicians and medical practices to encourage them to refer Horizon subscribers to BLS, offered its services free-of-charge to the subscribers so that they would consent to the referrals, and violated the disclosure requirements of the Clinical Laboratory Improvement Act.
Of particular concern are arrangements that an organization or physician group may have engaged in with BLS to rent space to BLS or provide services to BLS or both.
If you have any questions about your arrangement with Biodiagnostics or any other laboratory company, please do not hesitate to contact us.
Contact Us
If you currently are receiving payments from BLS or have received payments from them in the past you should contact our office immediately so that we can discuss this matter with you. The implications of this action by Horizon may be significant if a physician or physician group ultimately is a named party to this action.
The Complaint
Below is an excerpt from the Horizon Complaint. We have dealt with Horizon and Horizon’s attorney on multiple other similar matters. If you have any questions please feel free to contact Jonathan Levitt at Frier Levitt, LLC.
Excerpt from the Horizon Complaint
Defendant BLS Paid Referral Fees to Referring Providers
61. N.J.S.A. 45:9-42.42, prohibits Defendant BLS and its Principals from
soliciting the referral of specimens to its laboratory “in a manner which offers or implies an offer to pay the referring person any rebate, commission, split fee or other unearned remuneration in return for the referral.” (emphasis added)
62. N.J.A.C. 13:35-6.17(c)(1) prohibits Defendant BLS and its Principals from paying a physician "any fee, commission, rebate or bonus or other compensation however denominated, which a reasonable person would recognize as having been given or received in appreciation for . . . making or receive a referral to or from another for professional services.”
63. In violation of N.J.S.A. 45:9-42.42 and N.J.A.C. 13:35-6.17(c) (1) Defendant BLS entered into agreements with the physicians and medical practices to pay referral fees and other remuneration for the solicitation and referral of patients to Defendant BLS for clinical laboratory services.
64. Defendant BLS enters into "facility use” agreements and “service” agreements (or both) with each of its referring physicians and medical practices.
65. Pursuant to the terms of its facility use agreements, Defendant BLS places its own employees on the premise of the referring physician and pays "rent" to the referring physicians to encourage the referring physician to refer patients to BLS. The amounts paid to the referring physician exceed the fair market value of any lease for the use of the space and the agreements are terminable by either party without cause on thirty (30) days notice. (emphasis added)
66. Pursuant to the terms of its service agreements, Defendant BLS pays the referring physician a fee to have employees of the physician draw blood or collect samples from patients referred to Defendant BLS for services to encourage the referring physicians to refer patients to BLS. The amounts paid to the referring physician exceed the cost or value of any services provided and the agreements are terminable by either party on thirty (30) days notice. (emphasis added)
67. The fees and other remuneration paid by Defendant BLS to the referring physicians pursuant to the facility use agreements are not bona fide payments for the use of the premises by Defendant BLS personnel to draw blood and collect samples or for the reimbursement of costs incurred by the referring physicians to draw blood or collect samples. To the contrary, the referring physicians submit health insurance claims to Horizon to obtain payment for these services.
68. The fees and other remuneration paid by Defendant BLS to the referring physician are not bona fide payments for services rendered by employees of the referring physician. To the contrary, the referring physicians submit health insurance claims to Horizon to obtain payment for these services.
69. Defendant BLS entered into the referral agreements with the physicians and medical practices in order to submit claims for excessive and inflated fees; to avoid and circumvent the terms, conditions and limitations of the providers' agreements with Horizon; to undermine Horizon's provider network, and to obtain other unlawful economic benefits.
70. For services rendered from 2005 through June 9, 2009, Horizon paid Defendant BLS sum of $25,733,543, in reasonable reliance on and as a result of health insurance claims which resulted from Physicians and Medical Practices referral of patients to BLS. In addition, Horizon applied $10,927,261 in claims to subscriber deductibles.