Medical lab pays $1.5 million to settle Medicare fraud case brought by whistleblower

Oct. 6, 2000 — APL Healthcare Group, a medical testing and pathology lab, has agreed to pay the federal government $1.5 million to settle a Medicare fraud case brought by a whistleblower.

The whistleblower, Kevin Spear, charged in his "qui tam" lawsuit that APL billed Medicare from 1989 to 1993 for certain blood tests that doctors did not need for their patients and did not specifically order. APL automatically included the apolipoprotein tests when doctors ordered blood tests for cardiac risk evaluation. Doctors were unaware that APL billed Medicare separately for them.

Apolipoprotein tests measure the presence and levels of lipoproteins in the blood.

"It was a very expensive test that was not medically necessary in most cases," said Mary Louise Cohen, a Washington, D.C., attorney with Phillips & Cohen LLP, which represents Spear.

APL concealed the billing fraud from doctors by including the cost of the apolipoprotein tests in the charge for a "lipid panel" when the company billed physicians directly. When APL submitted bills to Medicare, it charged Medicare for the panel and for one or more apolipoprotein tests.

Spear, a former lab industry employee on the West Coast, filed his qui tam lawsuit under the False Claims Act in 1996 in U.S. district court in Phoenix. The case was kept under seal while the federal government investigated the allegations. Osborn Maledon of Phoenix, Ariz., served as local counsel on the case.

APL's headquarters is in Las Vegas, Nevada. It merged last year with American Medical Laboratories Inc.