DENVER — Colorado Attorney General John Suthers announced today that Colorado has received a share of a $12.4 million settlement with Madison, New Jersey-based Quest Diagnostics Inc. after one of its former subsidiaries, Nichols Institute Diagnostics, manufactured faulty medical-testing kits that resulted in inaccurate and unreliable laboratory tests that were billed to the state Medicaid program.
According to the settlement, Quest Diagnostics Inc. and Nichols Institute Diagnostics, which closed in April 2006, produced a testing kit that doctors and medical laboratories used to test patients with end stage renal disease to determine if they had overactive parathyroid glands. The blood tests, which showed an unusually high number of positive tests, were often billed to state Medicaid programs between 2000 and 2006.
As part of the settlement, Nichols Institute Diagnostics pleaded guilty to misbranding under the federal Food, Drug and Cosmetics Act.
Colorado received $37,000 as part of the settlement. The money was returned to the Colorado Department of Health Care Policy and Financing last week. All 50 states and the District of Columbia participated in the settlement.