“February 17, 1997 Intelligence:  Late Breaking Lab News”

Meris Laboratories of San Jose, California settled government claims of Medicare and MediCal fraud with an agreement to pay $5.2 million. The announcement, on February 12, closes another whistleblower suit.

MORE ON: Meris Labs…
Besides the cholesterol and serum iron tests which are commonly involved in these settlements, Meris was also nailed for billing hemogram indices. Tests involved in the fraud allegations were billed from 1992 through this year, indicating that federal investigators continue to interpret billing guidelines in new ways.

With wholesale prices for acute care hospitals unchanged in December, the Department of Labor’s Producer Price Index gained only 1.4% in 1996. This is a dramatic drop from 1995’s gain of 3.7% in hospital prices. The index confirms that managed healthcare is constraining the year-to-year increase in hospital prices.

Word is that the first budget proposal from the Clinton White House did not include cuts in laboratory reimbursement for Medicare. This is the first time in a number of years where the lab industry doesn’t start the budget process facing proposed reimbursement cuts.

LABONE CONTINUES TO GROW

Lenexa, Kansas-based LabOne, Inc. continues to show growth in both revenues and profits. Net earnings for fourth quarter climbed from $400, 000 to $1.0 million over the same quarter last year. The LabCard program now exceeds 1 million lives and LabOne’s recent acquisition of Gib Laboratories and Prudential’s life insurance testing business gives them a revenue boost going in to 1997.

CYTYC SITE

People touring Health Network Laboratories in Allentown, Pennsylvania will see two Cytyc ThinPrep® Pap Smear processors sitting side-by-side in the cytology department. Clinicians in the Lehigh Valley Hospital Healthcare System (Health Network’s parent) decided that the improved quality of Pap smears prepared with ThinPrep justified the additional cost. It is an interesting example of how one integrated healthcare system chooses to balance the cost of testing procedures against improved outcomes.

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