By: Christopher A. Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Law Defense and Compliance Firm

Magellan Diagnostics, Inc., a medical device company based in Billerica, Massachusetts, has agreed to pay $42 million to resolve criminal charges related to its concealment of a device malfunction that produced inaccurately low lead test results for potentially tens of thousands of children and patients. Magellan’s LeadCare devices, including LeadCare Ultra, LeadCare II, and LeadCare Plus, were widely used to detect lead levels in blood. The company admitted to misleading both its customers and the FDA about a malfunction that affected its devices when used with venous blood samples. This concealment led to false test results, failing to detect potentially harmful lead levels.

Magellan will plead guilty to violating the Federal Food, Drug, and Cosmetic Act. The settlement includes a $21.8 million fine, $10.9 million in forfeiture, and at least $9.3 million to compensate affected patients. Deferred Prosecution Agreement: This agreement will resolve felony conspiracy fraud charges against the company.

It is alleged that Magellan first learned of the malfunction during the FDA clearance process in June 2013 but did not disclose it. Customers discovered the malfunction independently and complained about inaccurate results. Magellan falsely claimed they had only recently identified the issue. Magellan failed to notify the FDA and customers about the LeadCare II malfunction until November 2016, despite knowing about it since 2013.

In 2017, Magellan provided false information to the FDA regarding the discovery timeline of the malfunction. The FDA eventually found that the LeadCare devices could not accurately test venous samples, leading to a recall and public warnings.

Lead exposure can cause irreversible health issues, particularly in young children and pregnant women. Accurate testing is crucial to prevent and mitigate these risks, making Magellan’s actions particularly harmful.

For more information on compliance issues and to ensure your practices adhere to federal regulations, contact Parrella Health Law at 857.328.0382 or email cparrella@parrellahealthlaw.com. We are here to assist healthcare providers in maintaining the highest standards of integrity and patient safety.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)