February 23, 2011

American Association of Bioanalysts’ Landmark Victory over New York State Department of Health Will Stand

On September 24, 2008, the Albany County Supreme Court issued a landmark ruling in favor of the American Association of Bioanalysts (AAB), represented by O’Connell and Aronowitz member Jeffrey J. Sherrin, against the New York State Department of Health (DOH).  AAB’s lawsuit alleged that the DOH’s Clinical Laboratory Evaluation Program was intentionally overcharging clinical laboratories to subsidize other activities that had no relation to regulating clinical laboratories.  In this Decision, which is available here, the court concluded that DOH has “turned the clinical laboratory reference system . . . into an unauthorized and unsupervised revenue stream that is limited only by the bounds of [DOH’s] creativity . . .”  This Decision was subsequently affirmed by the New York Supreme Court, Appellate Division, Third Department.

Marking the end of 12 years of litigation, on February 17, 2011, New York State’s highest court, the Court of Appeals, denied DOH’s request for leave to appeal AAB’s successful verdict. This means that DOH has exhausted its final avenue of appeal and must now provide refunds to the laboratories that were plaintiffs in the suit.  These refunds are anticipated to amount to a substantial portion of the money that these laboratories paid to DOH between 1998 and 2006.

For those interested in learning more about this case, background information is contained in the article, “AAB Scores Yet Another Victory Over NY State Department of Health,” reprinted here from the January 2011 AAB Bulletin.

Additionally, O&A has recently filed another lawsuit against DOH on behalf of over 100 independent and hospital clinical laboratories around the country that are regulated by the DOH.  This pending case also relates to laboratory fees charged by DOH.  The complaint in that action may be viewed here.

This post was contributed by David Nardolillo.