Doctors to Pay $1 Million for Lab Fee Markups : Courts: The agreement, which includes physician and clinic in O.C., is part of statewide investigation.


Five physicians and an Orange County medical clinic agreed Friday to pay more than $1 million in restitution and penalties for marking up patient lab test bills as much as 100% and failing to tell patients where tests were performed.

The agreement was reached the same day that civil complaints against the doctors and clinic were filed in superior courts in San Diego and Los Angeles counties.

The complaints named physicians Susan Debin of Orange; Victor Beer, Peter Kraus and Richard Cooper, all of Los Angeles, and Keith Vrhel of San Diego, as well as Convenient Medical Care of Orange.

The action is part of an ongoing, statewide investigation of illegal medical business practices being conducted by prosecutors in Los Angeles and San Diego, said Los Angeles County Deputy Dist. Atty. Thomas Papageorge.

More such complaints may be filed in coming days, he said, against doctors anywhere in California who are in violation of a 1993 state law that prohibits them from marking up lab tests when no service was performed to justify such costs.

The same law also requires physicians to disclose on patients' bills the name and address of the labs they used and the true cost of lab services such as urine and blood tests.

"Many doctors up and down the state are following the law, but many aren't," said Papageorge.

Before 1993, he said, the law on such matters was unclear. County prosecutors can file civil cases against any doctor in the state because medical services often are provided across county lines, he added.

Debin said Friday that she thought she was in compliance with the law, which she said is highly technical. She said she cooperated fully in the investigation.

"We have always strived to offer our patients the lowest cost in their lab work," Debin said. "Our research indicated we were as much as 50% lower than other labs in our area."

Together the accused doctors agreed to pay $452,878 in restitution to the California Public Health Foundation for health services to poor people, to the State Medical Board to finance educational projects and to various state trust funds.

They also agreed to pay $295,500 in costs to agencies involved in the investigation and $259,420 in civil penalties. In addition, they agreed to stop the illegal practices.

Debin said her portion of the settlement was very small but she was pleased that part of these funds will be used to educate other physicians.

"The business of being a physician today is extremely complicated and ever changing in this new medical environment," Debin said.

The settlements do not affect the doctors' licenses, said Papageorge, because they involve business, not medical, practices.

Times staff writer Len Hall contributed to this story.

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