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Federal Appeals Court Voids a Judgment Against Millennium Health

A federal appeals court voided a district court’s judgment against Millennium Health Sept. 3, stemming from an earlier claim that the San Diego company violated laws against kickbacks by giving physicians free urine testing cups.

Baltimore-based Ameritox Ltd. had sued Millennium, complaining that its practice of giving away point-of-care test cups — said to be worth about $5 each — amounted to an unfair business practice. The June 2014 judgement had awarded Ameritox, a competitor of Millennium, nearly $15 million in mostly punitive damages.

However, the appeals court concluded that the district court “abused its discretion” in allowing Ameritox’s “outlandish” claims to reach the jury and that Ameritox’s pursuit of its case “wasted both judicial resources and Ameritox’s money.”

The underlying case involved state and federal law claims around a point-of-care cup program that Millennium developed and implemented after consultation with health care lawyers in 2009. At trial, Millennium’s position was supported by several experts, including the former chief counsel to the Office of Inspector General Lew Morris, who testified that Millennium’s program was fully consistent with federal Stark and anti-kickback statutes.

Privately held Millennium offers medication monitoring, using urine drug testing and pharmacogenetic testing, to health care providers that treat pain, substance abuse disorders, psychiatric disorders and other chronic diseases.

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