Doctors to Pay $1 Million for Lab Fee Markups : Courts: Agreement is part of statewide investigation of physicians who add on to bills when no service was performed.


Five physicians and a 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 action is part of an on-going, 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 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.

The complaints filed Friday were against Drs. Victor Beer, Peter Kraus and Richard Cooper, all of Los Angeles; Dr. Susan Debin of Orange; Dr. Keith Vrhel of San Diego, and Convenient Medical Care of Orange.

Together they agreed to pay $452,878 in restitution to the California Public Health Foundation for health services to poor people, to the Medical Board of California 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.

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

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