A technician prepares urine sample for testing at the Swiss Laboratory for Doping Analysis in Epalinges near Lausanne REUTERS/Valentin Flauraud
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(Reuters) - A federal appeals court has upheld the dismissal of a whistleblower lawsuit accusing private equity firm HIG Capital and a pain management and surgery company it owned, Surgery Partners Inc, of running a scheme to bill Medicare for unnecessary urine drug tests.
An 11th U.S Circuit Court of Appeals panel found Friday that the lawsuit, filed in 2017 in Tampa, Florida, federal court, was barred by an earlier whistleblower lawsuit against Surgery Partners, even though that lawsuit, which resulted in a $41 million payout by Surgery Partners and its executives, did not name HIG.
The decision comes amid growing scrutiny of private equity firms' investments in healthcare.
Jeffrey Bushofsky of Ropes & Gray, a lawyer for HIG, declined to comment. Alan Wachs of Smith Gambrell & Russell, a lawyer for the plaintiffs, could not immediately be reached.
HIG bought Surgery Partners in 2009. In 2011, HIG and Surgery Partners formed a diagnostic company called Logan Labs, according to court filings.
The whistleblowers - Surgery Partners doctor Sheldon Cho, and Dawn...
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