Zombies vs Vampires — legal battle between corrupt medical labs

Right now a dead, bankrupt and corrupt laboratory company is suing an active, morally bankrupt lab company. No matter who eventually wins the court battle all of us — patients, Medicare, insurance companies, not to mention our entire health and legal systems — will lose.

Health Diagnostics Laboratory is the zombie lab company. After raking in hundreds of millions of dollars in a few short years for its owners and others, HDL went out of business last year. The reason: the company’s business model was illegal and unethical.

The company bribed doctors to order unnecessary tests — lots of unnecessary tests. Then it told patients that they would not be billed for the tests. This is also illegal.

But in its heyday the company reaped hundreds of millions of dollars in payments from Medicare and insurance companies.

True Health Diagnostics is the vampire lab company. When HDL went out of business this new company bought its remaining assets and adopted its business model of bribing doctors to order their tests and not collecting the patients’ portion of the bill. (Despite the company’s denials, True Health appears to have close connections with at least some of the major figures involved with HDL.)

Late last year the surviving legal remnant of HDL began efforts to collect from patients on some of the bills on which the company had promised, in writing, never to collect…

Patients panicked when they suddenly found themselves faced with thousands of dollars in bills. Naturally many of them called their doctors to complain, and many of the doctors complained to their True Health sales reps, since in many cases this was the same person.

True Health in turn panicked. It threatened to sue HDL. If doctors and patients believed that there was even a small chance that patients would be held responsible for thousands of dollars for their tests then their entire sleazy business model would topple like a house of cards. So the company sent letters to doctors, telling the doctors to tell their patients to ignore the letters.

This did not sit well with HDL, which then sued True Health…

I have no idea how the legal issues here will be resolved. I don’t know if patients who were promised they would never receive a bill can be held responsible for those bills because those promises were illegal. This kind of situation is exactly why we have so many lawyers but so little justice.

But I do know this: the one thing missing in the battle of the zombie lab versus the vampire lab is justice.

The responsible figures — the HDL leaders, its salesmen, and, especially, the doctors who ordered and profited from all these unnecessary tests — are not being held responsible. Many of the same doctors and salesman who participated in the earlier HDL scheme are now participating in the True Health scheme…

We’ll probably never know how many hundreds of millions of dollars were made by the HDL executives and salesmen and the doctors who participated in their scheme. And unless people start going to jail there will be no incentive to stop more schemes like this. Civil suits, by the government or by private insurance companies, will simply be viewed as the cost of doing business.

Gotta love self-regulating, self-policing crafts, trades, industries. Seems to me a great deal of what is involved here is plain and simple fraud. Some of it must have crossed state lines. If states won’t act responsibly – well, that’s why we have federal attorneys.

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