Alabama company, HDL swap lawsuits

Published January 29, 2015 by Virginia Business

Richmond-based Health Diagnostic Laboratory Inc. and a contractor that had handled its blood-testing services in many states are embroiled in a legal battle stemming from a federal civil investigation of
industry practices.

BlueWave Healthcare Consultants Inc. filed suit in U.S. District Court in Alabama in early January seeking nearly $205 million after HDL canceled its contract. BlueWave handled HDL blood-testing services sold in nine Southeastern states outside Virginia.

Five days later, HDL returned fire, suing BlueWave owners in federal court in Richmond. In the suit, HDL says it broke ties with BlueWave because some sales compensation provisions in the contract posed “potential risk” of violating federal and state laws.

A California laboratory company, Singulex Inc., canceled its contract with BlueWave in October. Both labs say they are expanding their sales forces to replace BlueWave.

Federal regulators are examining the practice of several blood-testing services, including HDL, of paying fees to doctors for processing and handling blood samples. HDL discontinued the practice after a federal agency warned that the fees could amount to kickbacks.

The Wall Street Journal reported in early January that HDL is in settlement talks with the Justice Department.

HDL also is seeking dismissal of a suit filed In October by health insurer Cigna, which is seeking repayment of $84 million in claims for blood tests.

HDL co-founder Tonya Mallory resigned as CEO in September to work with her brother’s manufacturing company in Nottoway County.

Mallory was named the magazine’s 2013 Virginia Business Person of the Year. Its recent troubles have been examined in several stories on VirginiaBusiness.com and in the November 2014 issue.