COVID lab testing company reportedly was paid up to $124 million for COVID-19 testing
What do an axe-throwing lounge, a donut shop, and a COVID-19 testing company have in common? All three were under the ownership of the same husband and wife. Apparently, though, COVID-19 medical laboratory testing was more lucrative. It’s been reported this married couple’s testing company received as much as $124 million just from federal health programs.
The co-owners are now being sued by multiple state’s attorney generals for allegedly failing to deliver SARS-CoV-2 test results and/or for delivering COVID-19 test results that “were falsified or inaccurate,” according to NBC News.
Chicago-based Center for COVID Control (CCC)—an operator of 300 pop-up COVID testing sites nationwide—faces investigations from state and federal authorities amid allegations of improper procedures and business practices. The company voluntarily suspended operations in January, when the allegations first surfaced, according to a company press release.
The founders, who had no prior clinical laboratory experience, now say they have turned their attention from running the sites to handling the investigations, USA Today reported. The newspaper was the first to publicly report problems with the company and its associated lab, Doctors Clinical Laboratory (DCL), both of which have the same address in suburban Chicago.
According to USA Today, “The Center for COVID Control was incorporated in December 2020, according to Illinois state filings. The business, which describes itself as a ‘test collection marketing and management firm,’ worked closely with Doctors Clinical Lab. Regulators didn’t visit the lab for an on-site inspection until the end of September of the following year, according to the Centers for Medicare and Medicaid Services. Regulators found the lab was not reporting coronavirus test results to public health officials.”
Questionable Collection Procedures for COVID-19 Testing
An earlier USA Today story by reporter Grace Hauck described an outdoor COVID-19 collection site in Chicago run by a man operating from a small shack powered by a generator.
“As he opens the door, piles of plastic bags, apparently grouped by test type, can be seen in crates on the ground,” Hauck reported. “He encourages test-takers to scan a QR code with their phones, fill out an online form with identifying information, and write a digitally-generated string of numbers on a paper sheet inside the plastic test kit bag.”
Hauck’s story noted complaints from readers about shoddy specimen collection procedures, conflicting or errant clinical laboratory test results, and failure to receive COVID-19 results in a timely manner.
Block Club Chicago, a non-profit news site, reported on Jan. 13 that inspectors from the Centers for Medicare and Medicaid Services (CMS) had uncovered numerous instances of “non-compliance” and “deficiencies” at DCL.
CMS lab inspectors found that DCL “could not process or store PCR test samples appropriately—while it was being inundated with tests,” the news site reported. “Over an 11-day period in November, the lab received 84,436 PCR test samples; over that period, it processed and reported 43,240 test results, according to the [CMS] report.”
Specific problems included:
Inadequate staffing, training, and quality controls at the clinical laboratory.
A lack of freezers needed to store test samples.
Failure to maintain confidentiality of patient information.
Failure to label samples with identifying information.
Failure to log complaints from test recipients.
USA Today reported that the FBI executed a search warrant at the companies’ suburban Chicago offices on Jan. 22.
State Actions against Doctors Clinical Laboratory and CCC
In addition to the federal actions, state attorneys general in Minnesota and Washington State both filed lawsuits against Center for COVID Control (CCC) and Doctors Clinical Laboratory (DCL).
“When Minnesotans and people from around the country tested with these companies to keep themselves and their families safe, they trusted they would get correct [COVID-19 test] results on time,” said Minnesota Attorney General Keith Ellison in a statement announcing a lawsuit against the two companies. “I’m holding these companies accountable that sent back false or inaccurate [COVID-19 test] results, when they sent them back at all, for deceiving Minnesotans and undermining the public’s trust in testing.” (Photo copyright: Office of Minnesota Attorney General.)
Washington Attorney General Bob Ferguson filed suit in King County Superior Court on Jan. 31. “Center for COVID Control contributed to the spread of COVID-19 when it provided false negative results,” he stated in a news release. “These sham testing centers threatened the health and safety of our communities.”
On Feb. 17, Ferguson announced that the court had granted a preliminary injunction that prohibited CCC from providing testing services in the state.
NBC News reported that authorities in other states have also taken actions against the company. Oregon and Illinois launched civil investigations, while “Massachusetts and Rhode Island have issued cease and desist letters to the company, and local regulators in Washington and California shut down several of its sites for operating without a license,” the newspaper reported.
Big Money in COVID-19 Testing
USA Today reported that CCC was launched in December 2020 by Akbar Syed, 35, and Aleya Siyaj, 29, a married couple. Siyaj is listed as being CEO of CCC since June 2021, according to her LinkedIn profile.
“Doctors Clinical Lab is registered under another person’s name in state records, but federal documents and multiple former employees and business partners claimed Siyaj and Syed run the lab and Center for COVID Control,” Block Club Chicago reported.
USA Today reported that DCL received more than $124 million in federal reimbursement for COVID-19 clinical laboratory testing and treatment. The paper also described a lavish lifestyle for Syed and Siyaj, including recent purchases of a $1.36 million mansion and multiple luxury cars. Asked on social media site TikTok about the source of his wealth, Syed stated, “COVID money,” according to USA Today.
Siyaj and Syed have denied wrongdoing, stating that they are now focused on “responding and cooperating with legal probes, and to clearing our good names,” according to a statement provided to USA Today.
Regulatory Loopholes
One question about CCC and DCL is how they were able to escape regulatory scrutiny. “Some experts said unscrupulous lab operators can take advantage of a regulatory opening that allows labs to register, test, and bill before inspectors finish a CLIA certificate survey,” USA Today reported. “In other cases, investors might purchase or establish management agreements with labs and begin testing before inspectors get in to verify the lab’s reliability.”
Pathologists and clinical laboratory managers will want to continue to watch the news, as other examples of fraud and incompetence by new companies that rushed into the COVID-19 lab testing marketplace are uncovered and investigated by both state and federal regulators.
Further, some of these companies may have generated more than $1 billion in payments from public and private sources after launching testing operations in the months after the arrival of the pandemic.
Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned
Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.
Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?
To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.
Value-Based Payment Has Its Ups and Downs
Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:
More doctors are accepting pay-for-performance payments: 44.5% in 2020, up from 42.3% in 2018, according to an American Medical Association (AMA) biennial report on physician participation in value-based reimbursement, titled, “Policy Research Perspectives: Payment and Delivery in 2020.”
On the other hand, Burda reported that value-based reimbursement also has these declining indicators:
39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)
Does Today’s Healthcare Industry Support Value-based Care?
A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:
“Physician compensation continues to emphasize volume more than value.
“Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
“Existing care models do not support value-based care.”
Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.
“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”
Hospital CFOs Also See Opportunities for Value-based Care
This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”
Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)
“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”
Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.
“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.
Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.
In an out-of-court settlement, two commercial clinical laboratory companies also agreed to reduce their prices for rapid antigen tests as well
How clinical laboratory companies were pricing their COVID-19 tests caught the attention of government authorities in South Africa. Government agencies in that country are establishing what they view as fair clinical laboratory pricing for private COVID-19 PCR (polymerase chain reaction) and rapid antigen tests without turning to litigation or fines.
The Competition Commission (Commission) is an organization charged with reviewing and acting on business practices in South Africa. In a December 11, 2021, news release, the Commission said it had reached a “ground-breaking agreement” with two private laboratories—Ampath and Lancet—to reduce their COVID-19 PCR test prices from 850 South African rand (R850) to R500 (from US$54.43 to US$31.97).
As of December 12, a third private laboratory company that also had been investigated, PathCare, had not agreed to the court settlement, Daily Maverick reported.
Also effective are lower prices for rapid antigen tests, the Commission said in a separate December 23 news release.
COVID Test Prices ‘Unfairly Inflated’
The changes in PCR test prices in South Africa followed a formal complaint by the Council for Medical Schemes which alleged the private pathology labs [the term for clinical laboratories in South Africa] were “supplying” COVID-19 PCR tests at “unfairly inflated, exorbitant, and/or unjustifiable” prices, Daily Maverick reported.
The clinical laboratory companies “exploited consumers by earning excessive profits on essential products or services,” Tembinkosi Bonakele (above), Commissioner of the South Africa Competition Commission, told the Daily Maverick. “It is always encouraging for companies to voluntarily consider reducing prices, especially where the public is detrimentally affected by the prices, as to avoid protracted litigation,” he added. (Photo copyright: Sowetan Live.)
According to the Daily Maverick, as part of the investigation, which began in October 2021, the Commission asked the private clinical laboratory companies for financial statements and costs of COVID-19 testing.
“We did, then, further interrogation in order to strip out what we saw was potentially padding the costing and unrelated costs. And on the basis of that, we came to the figure of R500,” James Hodge, told the Daily Maverick. Hodge is Chief Economist, Economic Research Bureau, and Acting Deputy Commissioner at the Competition Commission South Africa.
For its part, Lancet, Johannesburg, said in a statement that it “Appreciates the spirit of constructive engagement with the Commission which has resulted in an outcome that best serves the people of South Africa as they confront the fourth COVID wave. We are sensitive to the plight of the public and agree that reducing the COVID-19 PCR price is in best national interest.”
Clinical Laboratory Test Prices: Market Dynamics
So, were the prices too high? In the US, clinical laboratories are reimbursed considerably more by Medicare for COVID-19 testing (about $100), as compared to the South Africa private clinical lab prices.
Also, the Centers for Medicare and Medicaid Services (CMS) said in a statement that effective January 2021 it included in that rate an incentive of $25 to labs that provide results within 48 hours.
Medical laboratories are reimbursed $75 for a high throughput COVID-19 test when results are reported beyond 48 hours, CMS added.
Antigen Tests Prices Also Reduced
The Commission said that during its review of COVID-19 PCR test pricing it received a Department of Health Republic of South Africa complaint about prices for rapid antigen test pricing as well.
After another Commission review, PathCare, Lancet, and Ampath agreed to reduce prices for rapid antigen tests to a maximum of R150 or $9.74 (from a range of R250 to R350 or $16.28 to $22.79), a news release noted.
“The reduction of COVID-19 rapid antigen test prices will help alleviate the plight of consumers and widen accessibility and affordability of COVID-19 rapid antigen testing, which is a critical part of the initiatives to avoid escalation of the pandemic,” said Bonakele in the news release, which also stated that the Commission would receive financial statements from the three labs every few months.
The Commission also is reviewing a “large retail pharmacy chain’s” rapid antigen prices, which “follows a complaint lodged by the Department of Health (DOH), on December 14 2021, against service providers delivering COVID-19 Rapid Antigen tests in South Africa to consumers,” Cape Town Etc reported. The specific pharmacy chain was not identified.
Data Show COVID Plight in South Africa
More than 21.6 million COVID-19 tests have been offered by healthcare providers in South Africa, and 3.5 million cases were detected, according to the Department of Health, Republic of South Africa.
Considering those data, one wonders if the South African government acted fast enough on test pricing.
For medical laboratory leaders, it’s important to recognize that not only are lab services in the spotlight during the COVID-19 pandemic, business practices and prices also are being monitored by officials in this country.
When people receive COVID-19 testing at an out-of-network facility, federal law requires insurers to pay that clinical laboratory’s posted ‘cash price’ when negotiated prices have not previously been established
In the latest example that some COVID-19 testing companies are charging significantly higher prices than others, The New York Times (NYT) recently reported that one COVID lab company with “more than a dozen testing sites” throughout the US was charging $380 for a COVID-19 rapid test that can be purchased at many drug stores for $20. Sadly, this practice, the NYT also noted, is protected by federal law.
Media reporters and the lay public are not fully aware of the long-established clinical laboratory test payment modalities that govern the daily performance of tests ordered as part of regular healthcare. Thus, when the COVID-19 pandemic hit—along with tens of billions of federal dollars to pay for SARS-CoV-2 tests—it triggered a gold rush of people wanting to get into the clinical laboratory testing business specifically to make money.
It is the bad actors in this group who are tainting the entire clinical laboratory industry with often outrageous business practices that, at best, cross ethical lines—such as overpricing tests to consumers—and at worst, represent fraudulent behavior, such as inducing medically-unnecessary tests, then submitting claims for these tests.
Even as the pandemic appears to be waning, news outlets are reporting instances of insurers being charged higher “cash prices” for tests performed by out-of-network testing laboratories. Worse yet, federal law requires insurers to pay these exorbitant prices and they are not happy about it.
In-Network versus Out-of-Network Pricing
In its report, the NYT noted that the CARES Act (H.R. 748) requires insurers to pay whatever “cash prices” out-of-network labs post online, and that this is leading to “expensive coronavirus tests” that could ultimately be reflected in future “higher insurance premiums” charged to healthcare consumers.
One company the NYT highlighted in its report is GS Labs in Omaha, Neb., a provider of COVID-19 testing throughout the US. The testing company’s COVID-19 Pricing Transparency webpage lists these prices for the following COVID-19 tests:
“Insurers are obligated to pay cash price, unless we come to a negotiated rate,” Christopher Erickson, a GS Labs Partner, told the NYT.
Negotiate or ‘Pay the Provider’s Cash Price’
In Missouri, Blue Cross and Blue Shield of Kansas City (Blue KC) has filed a lawsuit against GS Labs. “This action seeks a judgment declaring Blue KC and our members are not required to pay GS Labs’ unreasonable, inflated reimbursement demands,” according to a Blue KC news release.
However, section 3202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act “specifies the process for private health insurance plan issuers to reimburse providers of COVID-19 diagnostic tests. Specifically, a reimbursement rate negotiated for such test prior to the public health emergency declared on January 31, 2020, continues to apply for the duration of the emergency. If a reimbursement rate was not negotiated prior to the emergency declaration, an issuer may either negotiate such rate or pay the provider’s cash price.”
In its own news release, GS Labs said it has “countersued Blue KC over the insurance company’s failure to pay $9.7 million for COVID tests covered by federal law.”
According to a legal expert who spoke with the NYT, GS Labs has grounds for its test charges due to the CARES Act. “Whatever price the lab puts on their public facing website, that is what has to be paid. I don’t read a whole lot of wiggle room in it,” said Sabrina Corlette, JD, Research Professor and Co-Director of the Center on Health Insurance Reforms at Georgetown University.
“Unfortunately,” noted Loren Adler (above), Associate Director of the USC-Brookings Schaeffer Initiative for Health Policy, in a blog post, “this ‘cash price’ is not a market-determined price—it is irrelevant to patients because all options have to be made free to them by law, so there is little constraint on how high this is set by testing entities. Nor is there any reason for out-of-network entities to accept any less than this amount (other than a desire to contract in the future with the insurer for fear of a public relations backlash). Moreover, in theory the patient can still be surprise balance billed if the provider’s charge is higher than this ‘cash price,’ though it is unclear why any provider would list a ‘cash price’ lower than their charge.” (Photo copyright: The Brookings Institution.)
In his analysis, Adler suggested the law be revised to require commercial insurers to pay for COVID-19 testing at Medicare prices.
Patient Receives a $54,000 ‘Surprise’ Bill for COVID-19 Out-of-Network Test
The patient, Travis Warner, reportedly has insurance from Molina Healthcare through the federal Health Insurance Marketplace. After an employee at his company tested positive for COVID-19, Warner drove 30 miles outside of Dallas in search of COVID-19 testing sites. He eventually visiting an out-of-network free-standing emergency room in Lewisville where he received PCR diagnostic and rapid antigen tests. The results of the tests were negative for COVID-19. But the bill was a shock.
The total bill came to $56,384. Molina Healthcare paid its negotiated rate of $16,915.20 for the testing and facility fee, leaving Warner responsible for the remaining $54,000!
In the end, Warner did not have to pay the bill. Molina resolved the charge with SignatureCare and, in a statement to KHN, wrote, “This matter was a provider billing error, which Molina identified and corrected.”
For its part, SignatureCare Emergency Centers, with freestanding centers throughout Texas, said it has a “robust audit process” to flag errors and processed “thousands of records a day” at the height of the pandemic, according to KHN, which reported the business showing a $175 price for a COVID-19 test on its website.
“If the insurance company is paying astronomical sums of money for your care, that means in turn that you are going to be paying higher (insurance) premiums,” Adler told KHN.
Insurance Group Finds Price Gouging
“Price gouging on COVID-19 tests by certain providers continues to be a widespread problem,” according to a statement by America’s Health Insurance Plans (AHIP), a national association representing insurers.
AHIP has studied COVID-19 test prices since April 2020. It released a survey earlier this year which found COVID-19 test prices were on average $130. However, AHIP also found that out-of-network providers charged “significantly higher” (more than $185) for more than half (54%) of COVID-19 tests (PCR, antigen, antibody) in March 2021—a 12% increase since 2020. More than 27% of COVID-19 tests in March 2021 were done out-of-network, a 6% increase since 2020.
However, in, “COVID-19 Lab Test Prices Give Some Health Plans ‘Indigestion’,” Dark Daily’s sister publication, The Dark Report, wrote, “Interestingly, [AHIP] researchers reported that the share of COVID-19 tests claims submitted from ‘high-cost locations’—identified as hospitals and emergency departments—declined from 18% in the first three months of the pandemic to only 5% during the first three months of 2021.”
Niall Brennan, President and CEO of the Health Care Cost Institute (HCCI), told KHN, “People are going to charge what they think they can get away with. Even a perfectly well-intentioned provision like [the CARES Act] can be hijacked by certain unscrupulous providers for nefarious purposes.”
Of course, most medical laboratories priced their tests fairly and have performed them in an efficient and professional manner during the pandemic. So, it is unfortunate to learn through AHIP’s survey findings and the media that some COVID-19 testing providers are posting prices that may confuse patients and affect their health insurance premiums.
Prostate cancer currently has the highest positive surgical margin rate of any cancer in men, with 21% of patients left with cancer cells at the resection site
Cancer surgeons may soon have a new technology to help them completely remove cancerous tissue during prostate cancer surgery. Called Cerenkov luminescence imaging (CLI), this new diagnostic technology under development at the Essen University Hospital in Essen, Germany, will be of interest to surgical pathologists since it could become a common intraoperative strategy to improve surgical precision during radical cancer procedures.
For example, radical prostatectomy is the removal of the entire prostate gland and surrounding tissues. It is one of the primary treatments for malignant cancer. Failure to remove all the cancer tissue during the procedure typically leads to poor clinical outcomes, including tumor reoccurrence and subsequent increased risk of metastasis and death.
A 2018 study published in Nature Scientific Reports, titled, “Positive Surgical Margins in the 10 Most Common Solid Cancers,” noted that prostate cancer has the highest positive surgical margin rate of any cancer in men, with 21.03% of patients left with remaining cancer cells at the resection site.
Currently, intraoperative frozen-section analysis of the prostate is the most common intraoperative method for real-time analysis of surgical margins. But research into CLI may provide surgeons with an additional strategy for reducing positive surgical margins.
“Our objective was to assess the feasibility and accuracy of Cerenkov luminescence imaging (CLI) for assessment of surgical margins intraoperatively during radical prostatectomy,” they wrote.
According to the Essen researchers, the “single-center” study “included 10 patients with high-risk primary prostate cancer. 68Ga-PSMA PET scans were performed followed by radical prostatectomy and intraoperative CLI of the excised prostate. CLI images were analyzed postoperatively to determine regions of interest based on signal intensity, and tumor-to-background ratios were calculated. CLI tumor margin assessment was performed by analyzing elevated signals at the surface of the intact prostate images.
“To determine accuracy, tumor margin status as detected by CLI was compared to postoperative histopathology. Tumor cells were successfully detected on the incised prostate CLI images and confirmed by histopathology. Three patients had positive surgical margins, and in two of the patients, elevated signal levels enabled correct identification on CLI. Overall, 25 out of 35 CLI regions of interest proved to visualize tumor signaling according to standard histopathology,” the Essen researchers concluded.
The research showed that CLI can accurately assess surgical margins during radical prostatectomy. This first in vivo research of the technique was conducted over a 17-month period between 2018 and 2019.
“Intraoperative radio guidance with CLI may help surgeons in the detection of extracapsular extension, positive surgical margins, and lymph node metastases with the aim of increasing surgical precision,” said the study’s first author Christopher Darr, PhD (above), a resident urologist at Essen University Hospital, in a Society of Nuclear Medicine and Molecular Imaging (SNMMI) news release. “The intraoperative use of CLI would allow the examination of the entire prostate surface and provide the surgeon with real-time feedback on the resection margins.” (Photo copyright: Essen University Hospital.)
The researchers found that two of three patients who had positive surgical margins were correctly identified using CLI images. Overall, 25 of 35 CLI regions of interest successfully visualized tumor signaling, which is a result in line with standard histopathology. The one positive surgical margin CLI missed had group 3 prostate cancer at the surgical margin.
Essen Study Finds CLI Results in ‘Higher than Expected’ False Positives
A companion article published in the JNM, titled, “Cerenkov Luminescence Imaging for Surgical Margins in Radical Prostatectomy: A Surgical Perspective,” noted that, “Although this is consistent with other studies showing reduced PSMA (prostate-specific membrane antigen) expression in lower-grade prostate cancer, the interval between PSMA-agent injection and CLI (median, 333 min) was long and potentially detrimental to identification of lower-grade [prostate cancer]. Future studies may aim to reduce the interval between PSMA-agent injection and commencement of surgery to improve signal intensity and potentially the overall sensitivity of CLI.”
The Essen University Hospital’s CLI feasibility study also revealed the technique resulted in a higher-than-expected number of false positives, with 10 of 35 regions of interest showing “elevated signal levels without histopathologic evidence of PC tissue at the resection margin.” Most of the false positives occurred at the prostate base.
The Essen study authors speculated that the presence of radioactive tracer in the urinary bladder and other factors may explain the false positive rate. They suggested that, “Further optimization of the CLI protocol, or the use of lower-energy imaging tracers such as 18F-PSMA, is required to reduce false-positives.”
The researchers called for a larger study to assess CLI’s diagnostic performance.
Boris A. Hadaschik, PhD, Director of the Clinic for Urology at Essen University Hospital, added, “Radical prostatectomy could achieve significantly higher accuracy and oncological safety, especially in patients with high-risk prostate cancer, through the intraoperative use of radioligands that specifically detect prostate cancer cells. In the future, a targeted resection of lymph node metastases could also be performed in this way. This new imaging combines urologists and nuclear medicine specialists in the local treatment of patients with prostate cancer.”
Because of the high reoccurrence rate of prostate cancer in men, surgical pathologists will find this potential new strategy for reducing positive surgical margins a welcomed advancement, but additional investigation will be needed to ensure its promise can be realized.
It did not take long for fraudsters to pursue hundreds of billions of federal dollars designated to support SARS-CoV-2 testing and it is rare when federal prosecutors bring cases only a few months after illegal lab testing schemes are identified
As if the COVID-19 pandemic weren’t bad enough, unscrupulous clinical laboratory operators quickly sought to take advantage of the critical demand for SARS-CoV-2 testing and defraud the federal government.
Unfortunately for the many defendants in these cases, federal investigations into alleged cases of fraud were launched with noteworthy speed. As a result of these investigations into alleged healthcare fraud by clinical laboratories and other organizations during fiscal year (FY) 2020, the US Department of Justice (DOJ) announced the US government has recovered $1.8 billion.
The federal prosecutions involved dozens of medical laboratory owners and operators who paid back “hundreds of millions in alleged federal healthcare program losses,” Goodwin Life Sciences Perspectives explained.
When combined with similar efforts starting in prior years, the program has returned to the federal government and private individuals a total of $3.1 billion, the DOJ noted.
“In its 24th year of operation, the program’s continued success confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of healthcare fraud, to prevent future fraud and abuse, and to protect program beneficiaries,” the report states.
According to the graphic above, which is based on analysis by B2B research company MarketsandMarkets, “North America will dominate the healthcare fraud analytics market from 2020–2025.” As clinical laboratory testing represents a significant portion of the fraud, medical lab managers will want to remain vigilant. (Graphic copyright: MarketsandMarkets.)
COVID-19 Pandemic an Opportunity for Fraud
The HHS report notes that the COVID-19 pandemic required CMS to develop a “robust fraud risk assessment process” to identify clinical laboratory fraud schemes, such as offering COVID-19 tests in exchange for personal details and Medicare information.
“In one fraud scheme, some labs are targeting retirement communities claiming to offer COVID-19 tests but are drawing blood and billing federal healthcare programs for medically unnecessary services,” the HHS report notes.
Still other alleged schemes involved billing for expensive tests and services in addition to COVID-19 testing. “For example, providers are billing a COVID-19 test with other far more expensive tests such as the Respiratory Pathogen Panel (RPP) and antibiotic resistance tests,” the report says.
“Other potentially unnecessary tests being billed along with a COVID-19 test include genetic testing and cardiac panels CPT (current procedural terminology) codes. Providers are also billing respiratory, gastrointestinal, genitourinary, and dermatologic pathogen code sets with the not otherwise specified code CPT 87798,” the report states.
Different Types of Healthcare Organizations Investigated in 2020
Beyond clinical laboratories, the HHS’ 124-page report also shares criminal and civil investigations of other healthcare organizations and areas including:
clinics,
drug companies,
durable medical equipment,
electronic health records,
home health providers,
hospice care,
hospitals and healthcare systems,
medical devices,
nursing home and facilities,
pharmacies, and
physicians/other practitioners.
According to the DOJ, “enforcement actions” in 2020 included:
1,148 new criminal healthcare fraud investigations opened,
440 defendants convicted of healthcare fraud and related crimes,
1,079 civil healthcare fraud investigations opened, and
1,498 pending civil health fraud matters at year-end.
“Federal Bureau of Investigation (FBI) investigative efforts resulted in over 407 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 101 healthcare fraud criminal enterprises,” the DOJ reported.
Furthermore, the report said OIG investigations in 2020 led to:
578 criminal actions against people or organizations for Medicare-related crimes,
781 civil actions such as false claims, and
2,148 people and organizations eliminated from Medicare and Medicaid participation.
Implications for Clinical Laboratories
In 2020, OIG issued 178 reports, completed 44 evaluations, and made 689 recommendations to HHS divisions.
Clinical laboratory leaders may be most interested in those related to patient identification as a means to combating fraud and Medicare Part B lab testing reimbursement.
The HHS report says, “Medicare Advantage (MA) encounter data continue to lack National Provider Identifiers (NPIs) for providers who order and/or refer … clinical laboratory services,” adding that, “Almost half of MA organizations believe that using NPIs for ordering providers is critical for combating fraud.”
Additionally, the report states, “Medicare Part B spending for lab tests increased to $7.6 billion in 2018, despite lower payment rates for most lab tests. The $459 million spending increase was driven by:
“increased spending on genetic tests,
“ending the discount for certain chemistry tests, and the
“move to a single national fee schedule.”
Medical laboratory leaders may be surprised to learn that federal healthcare investigators were so vigorous in their investigations, even during the worst of the COVID-19 pandemic.
Vigilance is critical to ensure labs do not fall under the DOJ’s scrutiny. This HHS report, which describes the types and dollars involved in fraudulent schemes by clinical labs and other providers, could help inform revisions to federal compliance regulations and statutes.
