Drug Testing Company Averhealth Scrutinized After Claims of Inaccurate Results — ProPublica

In 2020, a foster care supervisor in Montcalm County, Michigan, messaged her boss with concerns about drug testing. A father who was working to reunite with his children had tested positive for methamphetamine with the lab the state had a contract with, Averhealth, and the results contradicted tests ordered by other law enforcement agencies, she wrote.

“Judge indicated on the record that the issue of Averhealth’s testing results was a state-wide issue and that probate court judges all over the state were having similar problems.”

Months later, another official with Michigan’s Department of Health and Human Services wrote to colleagues about similar worries. “We are struggling to do casework with Averhealth and don’t trust them,” supervisor Sara Winter wrote. “We are making BIG decisions, including having parents leave home or removal, and that’s scary to do when you don’t trust who you’re getting services from.”

The cause of the discrepancies was unknown. But that year, 2021, Averhealth’s accreditor faulted its practices and placed the lab on a six-month probation, citing, among other issues, data manipulation and failed proficiency tests, which are done to ensure test accuracy.

When state officials caught wind of the investigation and repeatedly inquired about it, they hit a wall. The College of American Pathologists’ Forensic Drug Testing Accreditation Program told them that “findings of the investigation are kept confidential.” They asked Averhealth’s then-CEO Jason Herzog for all available reports on the lab. He was out of the office, he said, and promised to “track down when I have a good internet connection.”

Averhealth didn’t disclose that it had been placed on probation — its contract didn’t require such notification. And more than a year would pass before Michigan officials got a full picture of what accreditors observed at one of the nation’s largest drug-testing operations for child welfare, custody and probation cases. 

Michigan’s Department of Health and Human Services declined to comment on the messages its staff sent regarding Averhealth.

A ProPublica investigation found that Averhealth’s lab practices have not only been faulted by its own accreditor but also targeted in lawsuits, and prompted Michigan’s child welfare agency to order its employees not to use Averhealth’s tests as evidence in court and to withdraw any petitions based solely on the lab’s results.

Six former employees told ProPublica that the company’s central lab facility in St. Louis was mismanaged. The former employees, who include two chemists and two lab managers, complained variously of understaffing, broken and poorly maintained instruments, and pressure from management to speed up the delivery of test results, even when some feared they were compromising accuracy.

In statements and interviews, the company defended its practices and denied that leadership mismanaged its laboratory. “Averhealth provides accurate and forensically defensible test results,” company CEO Dominique Delagnes said in a statement. “The integrity of the data and information that we provide is of the highest importance to us.” Averhealth’s goal, she said, is to “reclaim lives, unite families, and strengthen communities” and “not separate children from their parents.”

Delagnes has called the choice to not inform Michigan officials of the company’s probation “a business decision” that was made by Herzog, whom she succeeded as CEO. Averhealth’s accreditor said the problems it observed at the lab weren’t concerning enough to halt testing.

The company attributed the conflicting test results flagged by officials in Montcalm County, Michigan, to different technical standards used by other labs, adding that it “in no way calls into question the accuracy or reliability of Averhealth’s testing.” It also said that no single test result has a significant impact on a case. “It usually takes a number of positive tests as well as other indications of risk before significant consequences are imposed,” a company spokesperson said in an interview. The company cited an independent review by outside scientists as evidence that its protocols are sound, along with the fact that Averhealth never lost accreditation.

In 2023, a group of parents filed a lawsuit alleging that test results were erroneous, which prevented them from seeing their children and in some cases caused them to lose custody permanently. “Averhealth’s false positive results have had a devastating impact,” according to the complaint, which cited “substantial emotional distress, including anxiety, depression, stress and sleeplessness.” Averhealth denied the allegations in the lawsuit, which it attributed to “opportunistic plaintiffs’ attorneys hoping for a windfall settlement and plaintiffs seeking to escape the consequences of their positive tests,” according to a statement. Averhealth settled the lawsuit in September.

ProPublica interviewed more than 50 people involved in family court or criminal proceedings who said they were tested by Averhealth and had received what they believed were inaccurate results. Some said they had tried to dispute the findings by presenting in court negative test results from other labs — one of the only ways to officially dispute a court-ordered drug test, and a strategy often recommended by attorneys. But tests from different labs are difficult to compare, and judges don’t always give credence to contradictory results.

“After multiple investigations and a probationary period, no entity or individual has found any material inaccuracy in Averhealth’s reported test result,” the company said in a statement.

After the lab’s probation was made public, Michigan’s and Georgia’s agencies overseeing child welfare cut ties with Averhealth. Michigan’s Department of Health and Human Services said in a statement that its “contract with Averhealth has expired and we have not used Averhealth since March 2022.” The Georgia Division of Family & Children Services told ProPublica in a statement that it did not renew the contract when it ended in 2023 “due to a variety of risks identified” during an assessment.

The lab’s problems went beyond what the accreditor found, some of the former employees told ProPublica. And those problems continued after the probation period ended, they said. 

Other government clients are sticking with the company. “They have been a valued partner of the Judicial Branch,” said a spokesperson for the Judicial Branch of Arizona in Maricopa County, whose Adult Probation and Family Court order 7,000-10,000 tests a month from the company.

The company that became Averhealth was founded in 1995 by former California police officer Rick McIntire, who spent his career in undercover narcotics and viewed drugs as a societal menace. Drug testing was booming, with courts getting federal grants to implement programs. Clinical labs were billing $600 a test, McIntire recalled. He saw an opportunity to charge less and make money on volume.

There is next to no regulation of court-ordered drug testing by the federal government, states or the courts. At one point, McIntire said, a hospital lobbyist sought legislation in California to ban labs like McIntire’s. McIntire said he convinced lawmakers that testing doesn’t require clinical expertise. “It was determined that this is non-diagnostic in nature,” he said, meaning it isn’t used to determine medical conditions. “Therefore, it doesn’t require any special licensing — you can be a businessman.”

In 2011, McIntire sold his company to investment bankers Herzog, Jeff Herr and David Keys, who later renamed it Averhealth. The trio, who did not respond to requests for comment, had no lab experience but specialized in mergers and acquisitions. Their goal, McIntire recalls from conversations with them, was to grow and sell. In 2019, Five Arrows Capital Partners, a private equity fund and arm of Rothschild & Co., acquired a majority stake. It valued Averhealth at $150 million, according to a deposition of Herzog for the parents’ lawsuit against the company.

With new investment, Averhealth “focused on growth by acquisition” of regional labs, “just trying to basically get new contracts,” one former finance team member said in an interview. The former employee asked not to be named to protect their job prospects. (Five Arrows and Rothschild & Co. did not respond to requests for comment.)

Averhealth markets its science as the gold standard. Its St. Louis lab is overseen by Ph.D. toxicologists and “is run by very dedicated and competent employees under well thought out guidelines,” current lab director Tonya Mitchell said in an email. Company marketing materials say it has the capability to detect when samples are diluted by cheating test-takers and to test for emerging and obscure drugs.

Christopher Totten, a former business development manager who pitched the company’s services in the Southeast, called Averhealth the Apple of judicial drug testing. Its methods are a vast improvement on — and significantly more expensive than — the in-house labs still used by some rural courts, where nonscientists use instant tests and don’t always confirm the accuracy of the results, he said.

Averhealth doesn’t publicly disclose its entire client list or total revenues from the many state agencies it serves. But in 2019, for example, the Michigan Department of Health and Human Services agreed to a five-year contract valued at an estimated $27 million to do testing for its child welfare system. And Massachusetts budgeted more than $5 million last fiscal year for the company to test probationers, according to public records.

The company boasts that its innovation extends beyond lab work. Its Aversys software, which randomizes testing schedules and collects data on test-takers, features “predictive analytics” that “ID patients at risk for relapse — before they relapse,” the company website stated in 2023. Averhealth said it did this by tracking when people called in to see if they would be required to test that day or otherwise interacted with its test-scheduling system.

Addiction experts say they are dubious of such claims. “To my knowledge, there is absolutely no scientific data to support the notion that irregularity in logging in to an app predicts relapse,” said Katie Witkiewitz, a professor of psychology and the director of the University of New Mexico Center on Alcoholism, Substance Use, and Addictions. According to a former employee with knowledge of Averhealth software, the company didn’t collect data to support this marketing claim. “I saw no evidence of them tracking outcome data on relapse,” said the former employee, who asked not to be named to protect their job prospects in the industry.

After being contacted by a reporter, the company removed from its website the claim that it can “ID patients at risk for relapse.”

The company said in a statement that “the website is continually updated, and regardless, Averhealth has never claimed to predict that a relapse will happen. It has only ever claimed that its software can identify those at risk.”

One of Averhealth’s biggest selling points is speed: The company promises to report results by the next business day. This requires its collection centers around the country to ship hair, saliva and urine samples overnight to Missouri, where the lab runs 24 hours a day.

Three former lab employees — a lab tech, a chemist and a lab manager — told ProPublica that they regularly worked 12- and even 14-hour shifts and still couldn’t meet the deadlines.

Pressure to speed up delivery of results came from the top, said another lab manager, who worked at Averhealth in 2022. The manager, who asked to remain anonymous to protect their job prospects, said lab instruments were regularly in disrepair and out of service, which made meeting deadlines difficult. The manager met regularly with Delagnes, who was COO at the time, and other upper management. The manager recalls them saying, “The clients are calling and screaming, ‘What are you going to do to get these results through?’ And often my answer was, ‘The instruments are broken again. I don’t have enough people.’” The manager was unsure whether instrument maintenance affected the accuracy of test results.

A former employee named Stephen Penn, a chemist who also worked at the company in 2022, said he experienced similar deadline pressures. “They emphasized speed over accuracy,” he said. When preparing samples for testing, “I was interested in getting it done well. But the push was to get it done fast.” Penn, who has over 20 years of experience in labs, left Averhealth “because of the speed issue.”

Another chemist, Jennifer Picker, who worked at Averhealth from January of 2021 to July of 2022, said that when loading samples onto an instrument that confirms results, called a high performance liquid chromatograph, she was pressured to speed up to the point that she worried samples would be linked to the wrong person. “I was always extraordinarily slow and meticulous about the placement of my sample on the HPLC. And there were a lot of complaints about that I wasn’t fast enough. And I’m like, ‘No way. This is that patient’s life.’”

Averhealth acknowledged that it emphasizes speed but added that it’s not at the expense of accuracy. “Averhealth requires its employees to work efficiently to meet its customers’ production standards and required turnaround times,” the company said in a statement. “Importantly, delaying test results could lead to a miscarriage of justice, as litigants’ cases are delayed and potentially endanger children and the community who rely on the court system, in cooperation with Averhealth, to keep them safe.” Delagnes said in a sworn statement provided to ProPublica that she has “never placed speed over accuracy in our lab testing, nor have I ever directed anyone else to do so.”

Picker, the chemist, shared documentation to support her allegation that standard lab practices weren’t followed at Averhealth, including a photo of a pipette maintenance log. Chemists were to complete the logs daily to verify instrument performance. But according to Picker, this didn’t happen. She noted that the photo shows each day’s required checks were signed in the same ink and handwriting. “I watched people fill this out retroactively,” she said.

Picker also shared a photo of urine samples outside the biohazard lab area, sitting on a desk next to personal items and snacks. This was a violation of policy, she said, citing notices posted in the lab stating that specimens were not to be removed.

Averhealth denied that lab instruments were broken or poorly maintained and that employees filled out maintenance logs retroactively. Regarding the photo of a pipette maintenance log, the company said: “The same employee would be responsible for filling out the log, so it makes perfect sense that they would have the same handwriting and use the same pen at their workstation.”

Averhealth initially told ProPublica that removing samples from the lab’s biohazard area and leaving them on a desk next to personal items and snacks was not a policy violation. Picker had a “fundamental misunderstanding of the lab security and sample integrity procedure,” it said. “There was no mishandling.” When presented with photos of a sign on a lab door saying not to remove samples from the area, a company representative said: “At any company there are going to be instances where potentially policies are not adhered to from time to time. I’m not aware that this is a significant issue for Averhealth.”

The company described Picker as “a disgruntled former employee pushing a false narrative” whose time at the company “was marked by repeated disciplinary issues, including bullying other employees and failing to report to work.” The company said in a statement, “Picker struggled to meet her workload, not because of company demands, but because the medication she was taking left her sleepy, lethargic, and frequently absent.”

Picker denied that she had disciplinary issues or struggled to meet her workload. While she did take an allergy medicine at work, she said it didn’t affect her performance. Picker said she resigned when her complaint about the misplaced urine samples was not taken seriously. Averhealth did not comment on Picker’s reasons for resigning.

The company also questioned Penn’s claim that the company “emphasized speed over accuracy.” In a statement, Averhealth said that Penn “did not raise any concerns about Averhealth before or after his resignation.” The company also noted that Penn is “closely connected to Ms. Picker.” (Penn rents living space in Picker’s home.) 

“I had made up my own mind about the company and separating from them,” said Penn. “What I observed, that they placed speed over accuracy, didn’t have anything to do with my relationship with Jennifer.”

Penn said he didn’t bring his concerns to the company because “I didn’t think it would make a difference.”

The most consequential and public criticism of Averhealth has come from Sarah Riley, a professor of pathology at Saint Louis University, who was hired as the lab’s director in September 2020. After seven weeks in that role, she abruptly resigned and filed a federal whistleblower lawsuit.

The Department of Justice investigated Riley’s claims and pursued a case, but chose to intervene on only some of the allegations.

According to the DOJ, the company had billed Michigan’s Department of Health and Human Services for tests it didn’t perform: Averhealth’s contract required it to confirm all positive drug tests using a second method; the government alleged it had tested samples only once.

Averhealth agreed to pay the DOJ $1.3 million to settle the case in June 2024. The company didn’t admit wrongdoing.

“We believe Averhealth fully performed under the MDHHS contract,” Delagnes said in a statement to ProPublica. “Averhealth settled the matter to avoid the cost and distraction of litigation.” The company said in a statement that because the DOJ investigated but did not intervene on Riley’s claim that its tests were inaccurate, Averhealth results are accurate.

Mark Johnson, who was Averhealth’s CEO from 2022 to 2024, said in an interview that Averhealth conducting just one test on the Michigan samples “didn’t impact reliability because we went to a more advanced test,” a test typically used to confirm an initial positive result. During the DOJ investigation, the company’s business “performed well” and the volume of tests it conducted continued to grow, Johnson added. 

Riley received a $228,586 whistleblower award from the DOJ settlement. She declined to comment for this article about her experience at Averhealth.

In February 2021, Riley was called to testify in a Michigan courtroom by a lawyer representing a mom trying to reunite with her kids in the foster system. The mom had tested positive for marijuana with Averhealth, but outside lab tests had found no evidence of drug use.

In court, Riley said that she had resigned from Averhealth after discovering what she considered to be problems with the lab’s accuracy. She testified that the lab routinely failed to use proper quality controls on its confirmation tests. Such tests, intended to definitively prove positive results, are performed on sophisticated lab instruments called mass spectrometers. According to Riley’s testimony, Averhealth technicians weren’t using the equipment properly because they “were under tremendous pressure” to report results quickly.

“Did you bring these concerns to the attention of the management of Averhealth?” the Michigan mom’s lawyer asked.

She had, Riley said. “Their reaction was, ‘Thank you for bringing us your concerns. Please don’t change anything at this time. We have contractual time agreements to get the data out, and we just want to get the data out.’”

The judge in the case, Lisa McCormick, declined to toss the contested Averhealth test results. “Dr. Riley’s testimony was speculative and did not provide the Court with any specific examples,” she wrote in her opinion. The judge later terminated the mom’s parental rights, according to court documents, citing missed drug tests and failure to benefit from services, among other issues. Termination of parental rights, which is typically irreversible, means children can be adopted by other families.

In 2024, Riley was deposed in Foulger vs. Avertest, the lawsuit brought by the parents who alleged their test results were incorrect. She again testified that the lab’s emphasis on speed was problematic. “Dominique and I had weekly calls, at least weekly, sometimes it was more than that,” Riley said of the CEO, “and the emphasis was always on getting the results out before anything else.” Her concern about speed was echoed by the former employees interviewed by ProPublica.

Averhealth denied Riley’s allegations about its lab practices and said that her testimony shows she misunderstood its science. Riley has estimated that Averhealth’s rate of inaccurate tests could be as high as 30%. In the 2024 deposition, she said the way the lab used calibrators was flawed and contributed to these errors. Calibrators ensure the measurements produced by mass spectrometers are correct.

But Averhealth said that she didn’t grasp how the lab distinguishes between positive and negative tests, and that its process had been endorsed by lab regulators.

The judge in the parents’ case expressed doubts that Riley’s allegations about accuracy would hold up in court. Before the case was settled, the judge wrote in an order, “At trial the Court may end up sustaining an objection to her opinion that thirty percent of Averhealth’s tests are unreliable unless Plaintiffs lay sufficient foundation to explain why her thirty percent estimate (which presumably arises solely out of testing hair samples for THC) is reliable as to other forms of tests for other drugs.”

Riley’s allegations triggered investigations by multiple outside scientists.

In January of 2021, Michigan’s Department of Health and Human Services hired an independent firm, Wagner Toxicology Associates, to audit Averhealth’s lab and address judges’ concerns about Riley’s allegations. Two toxicologists, who were unaware of Riley or her complaints, spent two days in the lab “to confirm that the laboratory personnel were performing their laboratory work in accordance with their laboratory manual,” they wrote. “A relatively small number of reports was audited during the visit, and the reporting process was observed.” Wagner Toxicology issued a nine-page report stating that Averhealth’s scientists were competent and followed procedure, and that the lab’s results could be “scientifically supported and forensically defended in court.”

Michigan’s agency didn’t know the separate, confidential investigation by Averhealth’s accreditor was also underway. That investigation, launched after Riley sent a letter to the accreditor, would reach different conclusions about the lab’s operations.

Averhealth’s accreditor is the forensic drug testing program at the College of American Pathologists, a private professional organization that provides expert oversight to forensic labs. In early 2021, the organization’s toxicologists reviewed thousands of pages of data from Averhealth’s lab and found “numerous” problems with hair, urine and oral fluid testing. “This laboratory has many quality assurance issues in the areas of quality control and proficiency testing,” Arthur Zebelman, commissioner of the forensic drug testing program, wrote in a 2021 email to colleagues that was later made public in a lawsuit.

CAP substantiated Riley’s allegations. In a letter, it stated that those allegations were: “concern regarding unacceptable quality assurance of mass spectrometry confirmatory testing”; “failure to follow procedures as written”; “concern regarding the manipulation of instrument calibrations”; and “concern regarding the review of quality control results.”

CAP informed Averhealth it was on probation “based on the laboratory’s lack of continuous compliance” with “quality management” standards.

The purpose of the investigation was to check whether the lab followed proper protocols, not to verify the accuracy of all the tests Averhealth had reported. But the question of false positives and false negatives did come up.

Internal emails show CAP scientists discussed how problems in the lab might impact test results but didn’t reach a definite conclusion about whether the issues they found would influence accuracy. “The laboratory does not seem to have a problem with false positive results,” one toxicologist wrote, adding that its process for determining the quantity or concentration of drugs “is at times unacceptable and they do not seem to take the timely resolution of such problems seriously enough.” Another toxicologist involved in the audit seemed to disagree. “Qualitative reporting errors could exist,” that toxicologist wrote, citing “imprecision and lack of quantitative accuracy.” A qualitative reporting error is a negative test that is reported as a positive, or vice versa.

The probation lasted six months, during which the lab continued testing. “CAP did not find any test results that were incorrectly reported and did not require Averhealth to rereport results with a different result,” the company said in a statement.

In an interview, Zebelman defended allowing Averhealth to continue testing while on probation.  The lab was forthcoming with records and cooperated with inspectors to fix errors, he said, emphasizing that CAP membership is a “voluntary, educational program for laboratory improvement. We’re not trying to create gotcha moments.”

Michigan’s Department of Health and Human Services repeatedly asked Averhealth about the investigation, according to public records reviewed by ProPublica. CAP told the state agency that the findings would be kept confidential.

Herzog, then Averhealth’s CEO, made the decision to not disclose that it was on probation, according to Delagnes, the current CEO, who said as much in a deposition in the parents’ lawsuit against the company. “I’m not trying to pass the buck. It was a business decision that started with him,” she said.

(CAP told ProPublica that government agencies could require labs to be more transparent about accreditation issues. A child welfare agency could, for instance, contractually require a lab to automatically notify it of accreditors’ revocations and probations. But most agencies haven’t done that, said Denise Driscoll, CAP’s senior director for accreditation and regulatory affairs.)

In July of 2021, after a nonroutine inspection, CAP lifted the probation, writing that “the allegations are being appropriately addressed.” 

Seven months after Averhealth’s probation ended, in 2022, Michigan’s Department of Health and Human Services learned from the DOJ that Averhealth was under investigation and had problems with accreditation. The Michigan agency immediately halted testing with Averhealth and told its workers to disregard the company’s results in any cases where they were the only evidence, according to court documents. (CAP agreed to give Michigan’s Department of Health and Human Services records related to the probation after Michigan had already halted testing.)

Averhealth didn’t comment on the agency directing its workers to disregard its drug tests as evidence.