Should We Care About Millennium vs. Ameritox?

After several years of back-and-forth lawsuits, motions, and court judgments between Millennium Laboratories (ML) and Ameritox in a case that primarily started out as an unfair competition and false advertising case, we may have finally reached a jury verdict that could have relevance for the rest of us working in the lab industry. A Florida jury on June 16 reached a verdict in the case concerning whether San Diego-based Millennium had provided remuneration that violated the Stark self-referral laws or the anti-kickback laws when it provided free point-of-care urine testing (POCT) cups to its client and potential clients as part of a program known as the “cup agreement” program. The jury ordered ML to pay Baltimore-based Ameritox $14.755 million, including $12 million in punitive damages. The jury verdict was a result of a motion filed by Ameritox seeking a partial summary judgment in its case against ML that the judge, Susan C. Bucklew, denied in part and allowed in part. ML opposed the motion to no avail. In the complaint relevant to this motion, Ameritox claims that ML engaged in unfair competition by providing POCT cups to doctors. In order to receive the free cups, doctors must agree not to bill anyone for the tests that can be conducted using the POCT cups; not to use the cups for any reason other than to collect urine samples, obtain the preliminary results, and transport the cups to ML for confirmatory testing; and to work with ML to account for the use of the cups and compliance with the cup agreement. Ameritox contends that the provision of the free cups violates the anti-kickback and or the Stark laws, while ML contends that is not the case because the physician is not receiving any financial benefit if they do not violate the cup agreement. Is the Provision of POCT Cups Remuneration? That is the question that was posed to the jury to decide, and the conclusion they reached is why we should all care about this case. One key element is ML’s argument that the POCT cups fall within the Stark exception that allows the provision of items that are used solely to collect, transport, process, and store specimens for the laboratory providing the items. ML also argues that the agreement falls under the exception that allows provision of items that are solely used to communicate the results of tests for the entity providing them. ML contends that what the government meant when it said “solely” was really “primarily” used for these purposes. The court was not convinced because of a statement made by the Centers for Medicare and Medicaid Services in 1998 when it said that “solely” meant exactly that and that a device or item will not meet this requirement if it had any other purpose besides those listed in the statute. In the case of the second assertion, the court said that the test strips contained in the POCT cups do not process specimens nor do they communicate results to ML. They communicate results to the physician or specimen collector but not ML. The court also ruled that the provision of the free POCT cups violated the anti-kickback statute for essentially the same reasons it violated the Stark law. The court left it to the jury to determine if the provision of the free cups to doctors who could bill but did not constituted remuneration under the Stark and anti-kickback laws. On June 16, the jury rendered its verdict, concluding that provision of the free cups did violate the Stark and anti-kickback laws. The jury awarded $14.755 million in actual and punitive damages for three of the six states involved. ML’s Response to the Verdict The day after the jury verdict, ML filed a document in the case notifying the court that it was voluntarily suspending the cup agreement program. The June 17 filing says that ML is suspending the program on a nationwide basis even though the jury only made findings in favor of Ameritox in four of the states and awarded damages in only three states. It also says that as a result of the May 5 court ruling granting Ameritox’s motion for partial summary judgment, it also promptly canceled 20 analyzer accounts that included cup agreements as well as about 20 legacy accounts that has “split cup” agreements. The document seeks to avoid any permanent injunctive relief for Ameritox in light of ML’s voluntary suspension of these programs and agreements, saying that there is no benefit to such an action since the cup agreements will no longer be used. The document also hints at further appeals in the case when it says that “Millennium has raised complex issues of federal law that it may present to the Eleventh Circuit for determination, and has agreed to suspend the cup agreement program during the pendency of that appeal.” It is here that we may find relevance for the rest of us. As the case continues to move forward, certain questions concerning what is and is not remuneration under the Stark and anti-kickback laws will affect all laboratories. Takeaway: Laboratories and their compliance officers can only speculate what will happen when a court or jury gets involved in the convoluted and complex laws that govern health care because most things are settled rather than actually adjudicated in a court of law.