April 12, 2011

Clinical Laboratories Recover over $5 Million in Landmark Victory over New York State Department of Health

Over $5 million is being refunded by the New York State Department of Health (NYSDOH) to 35 clinical laboratory members of the American Association of Bioanalysts (AAB), as a result of a lawsuit filed 12 years ago by O’Connell and Aronowitz.  The case was handled by Jeffrey J. Sherrin.

As we previously reported, on February 17, 2011, New York State’s highest court, the Court of Appeals, denied NYSDOH’s request for leave to appeal the AAB’s successful verdict against the NYSDOH for intentionally overcharging clinical laboratories to subsidize other activities that had no relation to regulating clinical laboratories.

The court rulings directed the NYSDOH to recalculate the costs of the reference system and refund any overcharges to the clinical laboratories that participated in the litigation.  The Department subsequently determined that 78% of the fees should be refunded, an amount equal to more than $5 million over the relevant time period (1998-2006).  The refund checks were dated March 28 and March 30, 2011.

O’Connell and Aronowitz has filed a second pending lawsuit against NYSDOH for permit and inspection fees from 2007 to the present on behalf of over 100 independent and hospital clinical laboratories around the country that are regulated by the NYSDOH.  The complaint in that action may be viewed here.

This post was contributed by Charles Dunham.