Quest and Nichols: Elevated PTH Results, Unchanged Accuracy Claims

In the 2009 Quest and Nichols PTH test kits settlement, Quest agreed to pay $262 million to the United States over allegations that unreliable test results caused false claims for laboratory tests and unnecessary treatments. The medical device fraud allegations reached beyond the kits themselves to the care patients received. The criminal information alleged that Nichols kept sending accuracy claims to laboratories after learning the tests did not consistently agree.

Quest Diagnostics’ subsidiary Nichols Institute Diagnostics manufactured, marketed and sold diagnostic test kits to laboratories across the country until 2006. A whistleblower’s qui tam case prompted the investigation. The Justice Department announced the settlement on April 15, 2009.

What Nichols Claimed About PTH Accuracy

The criminal information alleged that Nichols marketed its Advantage Intact PTH Assay as producing results nearly identical to its established IRMA Assay. According to the Eastern District of New York announcement, the company continued that representation after learning the tests did not consistently produce equivalent results.

The government’s account of the criminal information traces the comparison back to a successful product. Nichols launched the NID Intact PTH Immunoradiometric Assay in 1987. Known as IRMA, it gained widespread acceptance for accurate measurements of parathyroid hormone. The Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay followed in about 1996. Nichols marketed it as the Advantage Intact PTH Assay. Its marketing promised “excellent correlation” with IRMA, and its directional insert described a study in which the two tests produced nearly identical results in human blood samples. The section carrying that comparison was titled “Accuracy.”

The criminal information alleged that, by about May 2000 and at various later times, Nichols knew the Advantage assay was not consistently producing results equivalent to IRMA’s. It also alleged that Nichols knew the Advantage assay sometimes produced elevated PTH results after that date. The inserts and marketing materials continued to describe nearly identical results.

In its guilty plea, Nichols admitted that, beginning in about May 2000 and at various later times, it knowingly introduced the misbranded Advantage Intact PTH Assay into interstate commerce with intent to mislead.

That comparison was the sales promise: a laboratory could expect the newer test to agree with the established one. The criminal information alleged that Nichols knew the comparison was failing and kept using it to describe the product.

How PTH Results Reached Treatment Decisions

PTH testing helped clinicians assess whether patients with conditions such as end-stage renal disease also had hyperparathyroidism.

The announcement describes calcium and vitamin D supplementation as common treatments and, in certain circumstances, surgery to remove the parathyroid glands. The whistleblower alleged that both the Advantage Intact PTH and Bio-Intact PTH assays produced elevated results.

The government alleged that inaccurate results led to unnecessary care, with taxpayers billed for the test and the treatment it prompted.

The Laboratory Bill and the Treatment Bill

The civil case alleged two distinct paths to false claims: laboratories billed federal health care programs for tests using unreliable kits, and medical providers billed those programs for unnecessary treatment. The PTH allegations covered some kits producing materially inaccurate and unreliable results between May 1, 2000 and April 30, 2006, despite Nichols’s knowledge of the problem.

For the laboratory claim, the allegation connected the kit Nichols manufactured and sold to the test the laboratory performed and billed. For the treatment claim, the alleged connection ran further: an inaccurate test result informed a provider’s decision to prescribe care, followed by a claim for that care. The same assay could sit behind both, but the test bill and the treatment bill represented different services.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud puts the request for payment at the center of a False Claims Act case. Here, the government alleged that Nichols caused false bills even though laboratories and treating providers submitted them.

An employee who knew about the performance problem and a laboratory employee who knew how the test was used could see different parts of the same account. Our work is to connect that product knowledge to the clinical decisions and government claims it affected.

The Civil Allegations Reached Other Assays

The civil settlement covered the Advantage Intact PTH Assay and four other assays. Besides Bio-Intact PTH, those included ACTH, which measured adrenocorticotropic hormone in blood; 25-OH-D, which measured hydroxyvitamin D; and DHEA-S, which measured dehydroepiandrosterone sulfate.

For these other test kits, the government alleged that some produced materially inaccurate and unreliable results and caused purchasing laboratories to submit false reimbursement claims. The announcement ties the unnecessary-treatment allegations specifically to the PTH kits.

What the Settlement Required

Alongside the federal civil payment, Quest agreed to pay approximately $6.2 million to state Medicaid programs to resolve similar civil claims.

Quest’s five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General required independent reviews of how compliance concerns reached leadership and of compliance with Food and Drug Administration quality-system and labeling requirements.

The Same Problem in Point-of-Care Testing

Alere’s Triage devices later led to a similar False Claims Act settlement. In its 2018 announcement, the Justice Department described allegations that Alere sold materially unreliable point-of-care tests despite knowing about problems. A former senior quality-control analyst brought that case.

The useful parallel is what the manufacturer knew while the tests remained on sale. In the Nichols matter, the criminal information alleged that the company kept promising agreement with IRMA despite knowing the results diverged.

The Whistleblower’s Share

The government began its Quest and Nichols investigation after a whistleblower filed a qui tam case. The settlement announcement said the whistleblower would receive approximately $45 million from the False Claims Act recovery.

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

When the Label Outlasts the Evidence

If you saw assay results diverge from the accuracy claims still reaching laboratories, speak with our whistleblower experts about what changed and who knew. We build your case with you around the product decisions, clinical use and government bills, and bring in medical device whistleblower lawyers who understand diagnostic testing. We stay beside you as partners throughout the case, keeping what you know about the assay at the center of the work.