Scandal in the clinical lab industry - SmithKline Beecham

Scandal in the clinical lab industry - SmithKline Beecham

As medical technology advanced doctors were able to get more and more tests done in shorter and shorter amounts of time. Where in the past a doctor might order a potassium and glucose and it would take hours for the results, now a doctor can order a full chemistry panel of 20 or more different analytes and get the results in under an hour. The results are also much more accurate and reliable now than in the past. Thus, into the 1970s and 1980s the lab became a source of profit within the hospital structure. Some commercial labs began taking illegal and nefarious actions to increase their income. These practices included medicare and medicaid fraud by performing and billing for tests that the ordering physician never ordered, paying kickbacks to private doctor offices for sending their specimens to these reference labs, and other complicated criminal activity. These kickbacks included donuts, free computers, fax machines, and more. These events culminated mostly in the mid 1990s with the SmithKline Beecham (now GlaxoSmithKline) Clinical Laboratory (SBCL) scandal.[2] It is believed SBCL paid at least $325 million in penalties and the industry as a whole paid over $1 billion to insurance and government agencies that were defrauded. Ever since this time, the lab has become a source of expense and loss in the hospital budget (commercial labs have nothing to do with hospitals) and lab medicine's reputation was given a black eye. Now many labs have a compliance officer with mandatory annual meetings about compliance for all employees.