Verdict in Lab Battle: $15M
Millennium Laboratories, a San Diego company that specializes in urine testing nationwide, should pay its major competitor almost $15 million in damages for unfair business practices and violations of federal anti-kickback laws, a Tampa federal jury announced late Monday.
That competitor is Ameritox Ltd., which has headquarters in Baltimore. Ameritox brought the civil case against Millennium Labs in 2012 after state and federal authorities did not intervene, its attorneys said during the two-week trial.
Most of the damages -- $12 million of the total award of $14.755 million -- were punitive. The harm that Millennium's actions inflicted on Ameritox took place in three states, the jury said: Florida, Tennessee and Texas. Florida was the site of the most damage, the jury decided.
The jury assessed $8.7 million in damages for Millennium's sales practices in Florida, of which $7 million was punitive. Damages for the other two states were about $3 million apiece, most of it punitive.
What the jury regarded as illegal kickbacks -- violations of the federal Stark Law -- were free plastic urine specimen cups that had test strips built into them. Millennium Labs gave the $5 cups to doctors as a marketing tool, attorneys said during the trial. The idea was that doctors who got the cups might switch from Ameritox to Millennium for the confirmatory tests, for which Medicare and insurance companies often pay more than $100. And the cup giveaway appeared to work, judging from sales charts.
U.S. District Judge Susan Bucklew ruled before the trial began that at least some of the cup gifts to doctors violated the Stark Law and Anti-Kickback Statute. She left it up to the jury to decide whether the cups were illegal "remuneration" for the rest of the doctors.
Jay Wolfson, University of South Florida professor of public health and medicine, says that even small gifts can be an incentive for referrals.
“This isn’t about a $5 cup," he said. "It’s about a multibillion-dollar portion of the (health-care) industry.”
Millennium is expected to appeal the verdict.
Ironically, the financial award that the jury of six women and two men called for is close to the same amount that Ameritox paid in 2010 to settle federal charges similar to the ones in this case. Part of that settlement was a five-year corporate integrity agreement in which Ameritox promised extra vigilance in adhering to the law.
As Health News Florida reported last week, Ameritox may be in hot water itself soon: A federal prosecutor in New York has asked for a broad range of records about the company's billing practices. And a federal judge in Arizona says she will impose sanctions on Ameritox for violating a confidentiality agreement in a case in that state.