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      Headlines - April 18, 2005
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R. Lewis Dark: More Crime, More Consolidation, and a New Threat

IT'S A SHAME THAT OUR LEAD STORY IN THIS ISSUE IS CRIMINAL INDICTMENTS of six former IMPATH executives. It is a black mark on the lab industry and is just one more factor that makes it tougher for honest laboratorians to successfully lobby Congress on adequate funding for laboratory testing services.

Our follow-up story to crime at IMPATH is news of the just-announced sale of Esoterix, Inc. to Laboratory Corporation of America. It's another example of further consolidation within the laboratory industry. When Esoterix is bought by LabCorp sometime in the next ten weeks, it will remove another independent competitor from the national lab services marketplace.

Once you get past those two stories, you will find a detailed interview with Eric Drew. He's the cancer patient, near death, whose identity was ripped off by a phlebotomist in the hospital where he was being treated. Discovery of the crime launched Drew into an extraordinary investigation which culminated in the conviction of this nefarious lab worker under the HIPAA (Health Insurance Portability and Accountability Act) statute. It was the first-ever federal conviction of a HIPAA crime.

I'll bet you didn't hear about this story. Although it was national news when Gibson was convicted last summer as the first individual ever to be charged under HIPAA (Health Insurance Portability and Accountability Act), few people in the lab industry gave it more than passing interest. That changes with this issue of THE DARK REPORT.

Drew's story is exclusive to THE DARK REPORT. We have extensively researched these events for an important reason: lab managers and pathologists need to know how vulnerable their laboratory or pathology group practice is to the crime of patient identity theft. During the course of his interview with THE DARK REPORT, Drew explains, for the first time, many new details of how his identity was stolen. He also discusses the"do nothing" attitude of the hospital's privacy and compliance people when he first alerted them to the crime and requested their help to identify the perpetrator and bring him to justice.

I was shocked when I read Eric Drew's story. I believe the majority of you will also be shocked. I use the word"shock" deliberately. From the hospital to the police, the system failed Eric Drew—utterly and totally. My common sense tells me that the majority of labs and pathology group practices would do the right thing were a patient to show up and declare his/her identity was stolen and he/she has good reason to believe it occurred in the lab. But then again, do you have equal confidence that the privacy officer in your lab would acknowledge the possibility of a crime and support this patient in the search for truth—regardless of where it may lead your laboratory?



Ex-IMPATH Executives Face Criminal Charges

Federal government files various charges against six former IMPATH executives

CEO SUMMARY: With the announcement by Federal prosecutors of criminal and civil actions against a total of seven ex-IMPATH executives, IMPATH becomes the laboratory industry's worst criminal scandal. Federal prosecutors contend these executives, during their employment at IMPATH, engineered an accounting fraud that resulted in manufacturing as much as $64 million in non-existent revenue.



LabCorp Buys Esoterix For $150 Million in Cash

"Low" sales price surprises observers, another competitor removed from market

CEO SUMMARY: Laboratory Corporation of America continues to display an appetite to grow by acquisition. However, its purchase of Esoterix, Inc. creates unique management problems for LabCorp, because Esoterix is itself a product of a lab acquisition strategy. Over the past ten years, Esoterix acquired national specialty labs in coagulation, endocrinology, flow cytometry, and allergy testing.



NEWSMAKER INTERVIEW: Eric Drew

Victim of First HIPAA-Convicted Crime Tells Story & Offers Advice to Labs

CEO SUMMARY: Eric Drew's story may be one of the most amazing to have happened in the modern age of laboratory medicine. It is actually two stories, intertwined. In the first, a patient with the nearly-always fatal diagnosis of acute lymphoblastic lymphoma fights for his life, desperately trying one experimental procedure after another. In the second, an employee of the laboratory in the hospital providing these treatments decides this patient, expected to die sooner rather than later, is the perfect victim for identity theft. What the phlebotomist did not count on was that his crime would actually motivate the victim to fight—both for his life and to see the thief of his identity brought to justice. THE DARK REPORT is presenting this exclusive interview with the victim, Eric Drew, as a way to help laboratories and pathology group practices understand how to improve their defenses against patient identity theft committed by their own employees. Pamela Scherer McLeod conducted this interview.



Avoid Patient ID Theft With Proactive Steps

Eric Drew's remarkable story reveals vulnerability of every lab to this crime

CEO SUMMARY: Identity theft is one of America's fastestgrowing crimes. Not only that, it is simple to commit and can be done by anyone. Few laboratories and pathology group practices are prepared to deal with the crime of patient identity theft. Labs should proactively move to implement protections against patient identity theft and raise the awareness of employees to this type of crime.


INTELLIGENCE:

FLORIDA DOCTORS ESTABLISH THEIR OWN MEDICARE HMO

WHERE ARE THEY NOW?

 

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