State sues medical labs over billing


California is seeking to recover hundreds of millions of dollars -- possibly approaching $1billion -- from private medical laboratories accused of bilking the state Medi-Cal program by drastically overcharging for various tests, Atty. Gen. Jerry Brown said Friday.

Under a scheme involving what Brown called “massive Medi-Cal fraud and kickbacks,” seven companies, including five based in Los Angeles County, charged the state up to six times more than they charged some other customers for such services as urine analysis and blood count tests.

The Medi-Cal program provides healthcare services to the poor and is entitled to the deepest discounts available.


“In the face of declining state revenues, these medical laboratories have been ripping off our medical program for our most vulnerable people,” Brown said in Los Angeles. The civil suit was filed in San Mateo County.

The defendants include Health Line Clinical Laboratories, now known as Taurus West, and Physicians Immunodiagnostic Laboratory, both based in Burbank; Westcliff Medical Laboratories of Santa Ana; Pomona-based Whitefield Medical Laboratory; Seacliff Diagnostics Medical Group, based in Monterey Park; Quest Diagnostics, based in Madison, N.J., and five of its affiliates, including Specialty Laboratories, based in Valencia; and Laboratory Corp. of America, based in Burlington, N.C.

“Though we believe our inclusion in this suit is not justified, we plan to conduct an investigation into the allegations, cooperate fully with the authorities and vigorously defend Seacliff against these charges as we believe we will be vindicated in a court of law,” said Nancy Ogan, chief executive of Seacliff.


Times staff writer Ruben Vives contributed to this report.