Dianon Systems: Unperformed Second Opinions and Blanket Flow Cytometry

The first Dianon Systems fraud settlement resolved allegations of unperformed second-opinion consultations and unnecessary DNA analysis of urine cytology for $4.8 million. A later $1.5 million settlement concerned blanket flow cytometry. For someone inside a laboratory, those allegations raise different questions about the same bill: whether the work happened, why the tests were selected, and what the government paid for.

Dianon was a pathology laboratory. The federal Health Care Fraud and Abuse Control reports list the earlier resolution in fiscal year 2003 and the later one in fiscal year 2008.

Second Opinions Billed Without the Consultation

The earlier Dianon settlement covered allegations that second-opinion consultations were not performed and that DNA analysis of urine cytology was unnecessary. Taxpayers were being billed for an opinion that, according to the allegation, no one gave.

For a pathologist reading a consultation claim, we would compare the consultation charged with the work documented for that specimen and the person responsible for it.

For the urine-cytology allegation, the focus shifts to test selection. Why did this patient receive the DNA analysis? The order and the patient’s medical record address that question, while the laboratory’s performance records address what it did.

Blanket Flow Cytometry and the Patient Behind the Sample

In the Dianon settlement reported for fiscal year 2008, the government alleged that the laboratory ran 26 flow cytometry tests on every sample.

A laboratory insider may recognize the issue in a workup protocol: what causes the next test to run, who chose that condition, and where the patient’s findings enter the decision. A default test set can determine the work before anyone considers what distinguishes one specimen from another. That is why the protocol belongs beside the order and the results when we examine a blanket-testing concern.

Conditional orders show how specific that comparison can be. Medicare’s diagnostic-testing manual describes an order in which a treating clinician requests an additional test if the initial result meets a condition the clinician selected. The sequence connects the added work to a clinical decision and an actual result. In a blanket-testing case, we look for what drove the added work across patients.

The Test Menu Should Explain the Bill

Laboratory profiles carry information that the ordering physician needs to understand: which tests are included and how the laboratory will bill them. A 1997 Laboratory Medicine article, Model Plan Helps Laboratories Fight Fraud, described federal recommendations aimed directly at that gap.

The article reported that the Office of Inspector General’s model plan called for requisition forms with space to document the medical necessity of each test. It also described annual notices explaining profile components, the billing codes used and how Medicare would be billed. Its practical contribution was to put the contents of the profile and the resulting charges in front of the clinician making the order.

For an insider, those communications can explain what a profile meant to the customer. The laboratory’s test menu, the physician’s request and the submitted claim tell different parts of the story. Reading them together shows where a named profile became a set of services charged to the government.

What Evidence Is Needed to Prove Fraud?

For a healthcare fraud concern like Dianon’s, we work with you to connect what you know about the order, the patient’s need and the work performed to the bill. Each insider may see a different part of those decisions.

The records are divided between workplaces. Under Medicare’s documentation rules, the ordering clinician maintains the medical-necessity documentation in the patient’s record. The laboratory billing for the test keeps the documentation it received and support showing that its claim accurately reflects that information. That division explains why a laboratory employee and a referring practice may each see a different part of the same claim.

A pathologist may understand the consultation work or the testing decision. An employee handling orders may understand what the physician requested and what the laboratory added. Someone in billing may understand how the services became charges. The strongest account connects those decisions instead of stopping at an unusual test count.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Work Became a Bill

If you saw consultations charged without the work or a test set applied regardless of the patient, speak to one of our whistleblower experts about the consultations or tests your laboratory billed. We build the case with you and bring in laboratory fraud whistleblower lawyers who understand pathology services, test selection and Medicare billing. We stay beside you as your knowledge of the work becomes the foundation of the case.