May 9 Quest Diagnostics Inc said it
would pay $241 million to settle a civil lawsuit that alleged
that the company had failed to comply with regulations, leading
to overbilling for its services.
According to the lawsuit, Medi-Cal -- California's Medicaid
program -- had overpaid for the company's laboratory testing
Quest recorded a related pre-tax charge of $236 million, or
$1.19 a share, in the first quarter, the company said in a
The charge reduces its previously reported income from
continuing operations for the first quarter by $195 million, or
$1.19 per share, to a loss of $53 million, or 33 cents a share,
the company said.
The lawsuit was filed in the California Superior Court by
smaller rival Hunter Laboratories and the State of California
had intervened as a plaintiff.
Quest has agreed to reporting obligations regarding its
pricing for a limited period and will provide Medi-Cal with a
discount until the end of July 2012.
The company will be released from all claims in the lawsuit.
Quest Diagnostics' shares closed at $56.78 on Friday on the
New York Stock Exchange.
(Reporting by Shravya Jain in Bangalore; Editing by Saumyadeb