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Federal Investigations into Alleged Kickback Schemes between Hospitals and Physicians Increase in Number and Scope

Hospitals and other organizations are finding ways to pay physicians for referrals in ways that don’t always look like kickbacks

Hospitals nationwide are being scrutinized by the federal Office of the Inspector General (OIG) for allegedly violating federal anti-kickback statutes. This will be of interest to clinical pathology laboratories that have been under a similar spotlight for various referral-kickback schemes and arrangements in the last few years, which Dark Daily repeatedly covered.

Kaiser Health News (KHN) recently reported on investigations by the OIG into hospitals allegedly offering unusually high salaries and other perks to specialists because they attract highly profitable business.

In the KHN article, titled, “Hospitals Accused of Paying Doctors Large Kickbacks in Quest for Patients,” Senior Correspondent Jordan Rau describes one investigation of salaries that involved certain high-profile specialists at Wheeling Hospital, in Wheeling, W.Va.

Wheeling, KHN reported, paid one anesthesiologist $1.2 million per year, which, Rau notes, is higher than the salaries of 90% of the pain management specialists around the country. Rau went on to describe how Wheeling also paid one obstetrician-gynecologist $1.3 million per year, and a cardiothoracic surgeon $770,000 per year along with 12 weeks of vacation time.

In each of those cases, the whistleblower who prompted the qui tam investigation reported that the specialists’ various departments were frequently in the red, reported KHN.

“The problem, according to the government, is that the efforts run counter to federal self-referral bans and anti-kickback laws that are designed to prevent financial considerations from warping physicians’ clinical decisions,” wrote Rau.

Wheeling not only contests the lawsuits brought against it, but also has filed a countersuit against the whistleblower. KHN said the hospital claims “its generous salaries were not kickbacks but the only way it could provide specialized care to local residents who otherwise would have to travel to other cities for services such as labor and delivery that are best provided near home.”

“We are confident that, if this case goes to a trial, there will be no evidence of wrongdoing—only proof that Wheeling Hospital offers the Northern Panhandle Community access to superior care, [and] world class physicians and services,” KHN reported Gregg Warren (above), Vice President of Marketing and Public Relations at Wheeling Hospital, saying in a statement. (Photo copyright: LinkedIn.)

OIG’s Fraud and Abuse Laws: A Roadmap for Physicians

The KHN article mentions five laws the OIG lists on its website that are particularly important for physicians to be aware of. They include the:

  • False Claims Act: states that it’s illegal to file false Medicare or Medicaid claims.
  • Anti-Kickback Statute: states that paying for referrals is illegal, that physicians can’t provide free or discounted services to uninsured people, and that money and gifts from drug and device makers to physicians are prohibited.
  • Stark Law(physician self-referral): says that referrals to entities with whom the physician has a familial or financial relationship are off-limits.
  • Exclusion Statue: describes who cannot participate in federal programs, such as Medicare.
  • Civil Monetary Penalties Law: authorizes the Secretary of Health and Human Services, which operates the OIG, to impose penalties in cases of fraud and abuse that involve Medicare or Medicaid.

“Together, these rules are intended to remove financial incentives that can lead doctors to order up extraneous tests and treatments that increase costs to Medicare and other insurers and expose patients to unnecessary risks,” KHN said.

Other Hospitals Under Investigation

Wheeling Hospital is not the only healthcare institution facing investigation. The Dallas Morning News (DMN) reported on a case involving Forest Park Medical Center (FPMC) in Dallas that resulted in the conviction of seven defendants, including four doctors. Prosecutors outlined the scheme in court, saying that FPMC illegally paid for surgeries.

“Prosecutors said the surgeons agreed to refer patients to the Dallas hospital in exchange for money to market their practices,” DMN reported, adding “Patients were a valuable commodity sold to the highest bidder, according to the government.” 

One of the convicted physicians, Michael Rimlawi, MD, told DMN, “I’m in disbelief. I thought we had a good system, a fair system.” His statement may indicate the level to which some healthcare providers at FPMC did not clearly understand how anti-kickback laws work.

“The verdict in the Forest Park case is a reminder to healthcare practitioners across the district that patients—not payments—should guide decisions about how and where doctors administer treatment,” US Attorney Erin Nealy Cox told DMN.

Know What Is and Is Not a Kickback

Both the Wheeling Hospital investigation and the Forest Park Medical Center case make it clear that kickbacks don’t always look like kickbacks. Becker’s Hospital Review published an article titled “Four Biggest Anti-Kickback Settlements Involving Hospitals in 2018” that details cases in which hospitals chose to settle.

These four incidents involved hospitals in Tennessee, Montana, Pennsylvania, and New York. This demonstrates that kickback schemes take place nationwide. And they show that violations of the Stark Law, the False Claims Act, and the Anti-Kickback Statute can happen in numerous ways.

Whether in a clinical laboratory or an enterprisewide health network, violating laws written to prevent money—rather than appropriate patient care—from being the primary motivator in hiring decisions, may result in investigation, charges, fines, and even conviction.

“If we’re going to solve the healthcare pricing problem, these kinds of practices are going to have to go away,” Vikas Saini, MD, President of the Lown Institute, a Massachusetts nonprofit that advocates for affordable care, told KHN.

Though these recent OIG investigations target hospitals, clinical laboratory leaders know from past experience that they also must be vigilant and ensure their hiring practices do not run afoul of anti-kickback legislation.

—Dava Stewart

Related Information:

Hospitals Accused of Paying Doctors Large Kickbacks in Quest for Patients

A Roadmap for New Physicians: Fraud and Abuse Laws

Surgeons, hospital owner convicted in massive kickback scheme involving Forest Park Medical Center

Four Biggest Anti-Kickback Settlements Involving Hospitals in 2018

Clinical Laboratory Compliance Practices Under Pressure as Federal Spotlight Is Aimed at Common Fraud and Abuse Schemes; Penalties for Violations Surge

Biodiagnostic Laboratory Services Leaders Sentenced to Prison in $100-Million Lab Test Kickback Scheme That Also Led to Convictions of 38 Physicians Does New Opioid Law Require Clinical Laboratories to Change How They Pay Sales Employees?

UK’s NHS to Distribute New Clinical Laboratory Test for Women Suspected of Having Pre-Eclampsia

Based on clinical trials of the medical laboratory test, pregnant women can expect a reduced risk for experiencing complications associated with the dangerous blood disorder

Clinical pathology laboratories and obstetricians in the UK may soon have a new blood test that can help provide earlier diagnoses of pre-eclampsia, a hypertensive disorder of pregnancy that can cause liver and kidney disfunctions and, if untreated, can lead to eclampsia and deadly seizures.

Following a clinical trial conducted by scientists at King’s College London (King’s College), the National Health Service (NHS) in the United Kingdom (UK) announced it would be making the new test widely available.

The researchers published their findings in The Lancet medical journal. Their paper explains that the clinical trial took place in 11 maternity units in the UK from June 2016 through October 2017. And that 1,023 women were divided into two groups:

  • 576 (56%) were in the “intervention group,” meaning they had PGF test results made available to their maternity teams;
  • 447 (44%) did not have PGF test results made available.

The researchers, the Independent reported, wanted to determine the impact, if any, the new test’s results would have on diagnoses.

Significantly Reduced Time to Diagnosis

Trial results indicated that measuring the placental growth factor (PGF) in women who are suspected of having pre-eclampsia can increase speed to diagnosis. “PGF testing was shown to reduce the average time to pre-eclampsia diagnosis from 4.1 days to 1.9 days, and serious complications before birth (such as eclampsia, stroke, and maternal death) [dropped] from 5% to 4%,” a King’s College press release stated.

“Complications like stroke, seizures and maternal death fell by 20% when doctors had access to PGF testing,” the Independent reported.

The researchers stated in their study, “Our trial has shown that, in women presenting with suspected pre-eclampsia, PGF measurement, incorporated into a management algorithm based on national guidelines, significantly reduces the time taken for treating clinicians to diagnose pre-eclampsia. This improvement was associated with a significant reduction in maternal adverse outcomes, with no detected difference in gestational age at delivery or adverse perinatal outcomes.”

The King’s College press release states, “Pre-eclampsia is suspected in around 10% of UK pregnancies, affecting approximately 80,000 women annually. If untreated, it can progress to cause complications in the woman, including damage to vital organs, fits, and can be fatal for the woman and baby. Globally, 100 women die as a result of the condition every day.”

The release also noted that “doctors were able to diagnose pre-eclampsia on average two days sooner. This was associated with significant improvements in outcomes for women without causing health problems for babies.”

Tony Young, PhD (above), National Clinical Lead for Innovation at NHS, stated in the King’s College press release that “This innovative blood test helps determine the risks of pre-eclampsia in pregnancy, enabling women to be directed to appropriate care or reduce unnecessary worry more quickly.” (Photo copyright: LinkedIn.)

Measuring PGF in Clinical Laboratory Study

PGF is a molecular marker for inflammation associated mostly with the mother’s placenta. The King’s College researchers wanted to find out if a quicker diagnosis of pre-eclampsia was possible. And, if so, could it reduce adverse outcomes in the mother and baby?

“For the last hundred years, we have diagnosed pre-eclampsia through measuring blood pressure and checking for protein in a woman’s urine. These are relatively imprecise and often quite subjective,” said Lucy Chappell, PhD, NIHR Research Professor in Obstetrics at King’s College, and lead author of the study, in the news release.

“We knew that monitoring PGF was an accurate way to help detect the condition, but [we] were unsure whether making this tool available to clinicians would lead to better care for women. Now we know that it does,” she concluded.

Pre-eclampsia can lead to stroke, seizures, and even death of expectant mothers and unborn children. It is usually diagnosed after 20 weeks of gestation through blood pressure tests and urine tests that show hypertension and elevated protein levels.

“We found that the availability of PGF test results substantially reduced the time to clinical confirmation of pre-eclampsia. Where PGF was implemented, we found a lower incidence of maternal adverse outcomes,” the researchers wrote in their study.

Similar Study in the US

In the UK, pre-eclampsia affects about one in 20 pregnancies or 80,000 women each year, New Scientist explained. While in the US, data compiled from the Centers for Disease Control and Prevention (CDC) indicate that pre-eclampsia affects one in 25 pregnancies or about 154,220 women annually.

Researchers in Ohio also recently reported on a test and a piloted clinical study for rapid diagnosis of pre-eclampsia.

Scientists at Ohio State University’s College of Medicine and Wexner Medical Center (OSU), and at Nationwide Children’s Hospital, have developed a non-invasive red-dye-on-paper urine test to identify pre-eclampsia at the point-of-care, a Wexner press release announced.

“This is the first clinical study using the point-of-care, paper-based Congo Red Dot (CRD) diagnostic test, and the mechanism proved superior in establishing or ruling out a diagnosis of pre-eclampsia,” Kara Rood, MD, a maternal-fetal medicine physician at Wexner Medical Center and first author of the study said in the Wexner press release. “Our findings will have a huge impact on the health of women and children.”

The researchers published their findings in EClinicalMedicine, a Lancet Journal.

“Pre-eclampsia is often described as ‘mysterious’ because it’s difficult to diagnose. Our researchers show that there’s an easy, non-invasive test that will help diagnose this condition and maintain the health of pregnant women and their babies,” K. Craig Kent, MD, OSU Dean of the College of Medicine, said in the press release.

Clinical laboratory tests such as these being developed in the US and abroad could help pregnant women worldwide experience happy pregnancies and give birth to healthy babies. Medical laboratory leaders in this country may want to stay abreast of the development of these simple blood and urine tests.

                                                                        —Donna Marie Pocius

Related Information:

Pre-Eclampsia: NHS to Roll Out Breakthrough Test Which Speeds Up Diagnosis and Can Save Lives

Blood Test Helps Accurate, Rapid Diagnosis for Pre-eclampsia

Blood Pressure in Pregnancy

Placental Growth Factor Testing to Assess Women with Suspected Pre-eclampsia: a Multi-Centre, Pragmatic, Stepped-wedge Cluster Randomized Controlled Trial

Pre-Eclampsia Blood Test Could Help Diagnose the Condition Earlier

Research Finds Simple Urine Test Allows for Rapid Diagnosis of Pre-eclampsia

Medical Laboratory Testing Company uBiome Raided by FBI for Alleged Insurance Fraud and Questionable Business Practices

Following the raid, the company’s co-founders resigned from the board of directors

Microbiome testing company, uBiome, a biotechnology developer that offers at-home direct-to-consumer (DTC) test kits to health-conscious individuals who wish to learn more about the bacteria in their gut, or who want to have their microbiome genetically sequenced, has recently come under investigation by insurance companies and state regulators that are looking into the company’s business practices.

CNBC reported that the Federal Bureau of Investigation (FBI) raided the company’s San Francisco headquarters in April following allegations of insurance fraud and questionable billing practices. The alleged offenses, according to CNBC, included claims that uBiome routinely billed patients for tests multiple times without consent.

Becker’s Hospital Review wrote that, “Billing documents obtained by The Wall Street Journal and described in a June 24 report further illustrate uBiome’s allegedly improper billing and prescribing practices. For example, the documents reportedly show that the startup would bill insurers for a lab test of 12 to 25 gastrointestinal pathogens, despite the fact that its tests only included information for about five pathogens.”

Company Insider Allegations Trigger FBI Raid

In its article, CNBC stated that “company insiders” alleged it was “common practice” for uBiome to bill patients’ insurance companies multiple times for the same test.

“The company also pressured its doctors to approve tests with minimal oversight, according to insiders and internal documents seen by CNBC. The practices were in service of an aggressive growth plan that focused on increasing the number of billable tests served,” CNBC wrote.

FierceBiotech reported that, “According to previous reports, the large insurers Anthem, Aetna, and Regence BlueCross BlueShield have been examining the company’s billing practices for its physician-ordered tests—as has the California Department of Insurance—with probes focusing on possible financial connections between uBiome and the doctors ordering the tests, as well as rumors of double-billing for tests using the same sample.”

Becker’s Hospital Review revealed that when the FBI raided uBiome they seized employee computers. And that, following the raid, uBiome had announced it would temporarily suspend clinical operations and not release reports, process samples, or bill health insurance for their services.

The company also announced layoffs and that it would stop selling SmartJane and SmartGut test kits, Becker’s reported.

uBiome Assumes New Leadership

Following the FBI raid, uBiome placed its co-founders Jessica Richman (CEO) and Zac Apte (CTO) on administrative leave while conducting an internal investigation (both have since resigned from the company’s board of directors). The company’s board of directors then named general counsel, John Rakow, to be interim CEO, FierceBiotech reported.

John Rakow (center) is shown above with uBiome co-founders Jessica Richman (lower left) and Zac Apte (lower right). In a company statement, Rakow stressed that he believed in the company’s products and ability to survive the scandal. His belief may be based on evidence. Researchers have been developing tests based on the human microbiome for everything from weight loss to predicting age to diagnosing cancer. Such tests are becoming increasingly popular. Dark Daily has reported on this trend in multiple e-briefings. (Photo copyrights: LinkedIn/uBiome.)

After serving two months as the interim CEO, Rakow resigned from the position. The interim leadership of uBiome was then handed over to three directors from Goldin Associates, a New York City-based consulting firm, FierceBiotech reported. They include:

Four testing products remain available for in-home testing on the uBiome website:

What Went Wrong?

Richman and Apte founded uBiome in 2012 with the intent of marketing a new test that would prove a link between peoples’ microbiome and their overall health. The two founders initially raised more than $100 million from venture capitalists, and, according to PitchBook, uBiome was last valued at around $600 million, Forbes reported.

Nevertheless, as a company, uBiome’s future is uncertain. Of greater concern to clinical laboratory leaders is whether at-home microbiology self-test kits will become a viable, safe alternative to tests traditionally performed by qualified personnel in controlled laboratory environments.

Dark Daily reported on the controversy surrounding this trend in “At-Home Microbiology Tests Trigger Concerns about Scientific Value and Impact from Microbiologists and Clinical Laboratory Scientists,” October 16, 2017.

It’s a trend worth watching.

—JP Schlingman

Related Information:

Insiders Describe Aggressive Growth Tactics at uBiome, the Health Start-up Raided by the FBI Last Week

FBI Investigating uBiome’s Billing Practices

Turmoil Persists at uBiome with New Management Overhaul Amid FBI Probe: Reports

uBiome Appoints John Rakow as Interim Chief Executive Officer

Another Shakeup at uBiome: Interim CEO Quits

Seven Updates on the Ongoing uBiome Investigation

Microbiome Startup uBiome Cofounders on Administrative Leave after Reports of FBI Raid

Microbiome Testing Startup Under Scrutiny for Billing Practices

At-Home Microbiology Tests Trigger Concerns about Scientific Value and Impact from Microbiologists and Clinical Laboratory Scientists

University Researchers Develop Microfluidic Device That Partitions Cancer Cells According to Size in Effort to Create a Useful Liquid Biopsy Method

Could a fast, cheap, and accurate liquid biopsy diagnostic cancer test soon be available to clinical laboratories and anatomic pathology groups?

What if medical laboratories worldwide could perform a simple liquid biopsy diagnostic test that detected cancer in its various forms? Such a test, if affordable and accurate, would be a boon to histopathology and clinical pathology laboratories. Until now, though, such a test has proven to be elusive. But, researchers at the University of Illinois at Chicago (UIC) and Queensland University of Technology (QUT) in Australia think they may have such a technology in hand.

The researchers unveiled a diagnostic device that uses microfluidic technology to identify cell types in blood by their size. The device also “can isolate individual cancer cells from patient blood samples,” according to a news release.

The ability to isolate circulating tumor cells could enable clinical laboratories to perform diagnostic cancer tests on liquid biopsies and blood samples. Dark Daily reported on various studies involving liquid biopsies—an alternative to invasive and costly cancer diagnostic procedures, such as surgery and tissue biopsies—in previous e-briefings.

The new device differs from other microfluidic technologies that rely on biomarkers to attach to tumor cells (aka, affinity separation), New Atlas reported. Papautsky co-authored a research paper on their findings published in Nature: Microsystems and Nanoengineering.

“This new microfluidics chip lets us separate cancer cells from whole blood or minimally diluted blood. Our device is cheap and doesn’t require much specimen preparation or dilution, making it fast and easy-to-use,” said Ian Papautsky, PhD, Professor of Bioengineering at University of Illinois at Chicago, in the news release. He is shown above with members of the Papautsky Lab, which has been developing “microfluidic systems and point- of-care sensors for public health applications.” (Photo copyright: University of Illinois at Chicago.)

Searching for ‘Purity’

The UIC and QUT researchers were motivated by the information-rich nature of circulating tumor cells. They also saw opportunity for escalated “purity” in results, as compared to past studies.

In the paper, they acknowledged the work of other scientists who deployed microfluidic technology affinity-based methods to differentiate tumor cells in blood. Past studies (including previous work by the authors) also explored tumor cells based on size and difference from white blood cells.

“While many emerging systems have been tested using patient samples, they share a common shortcoming: their purity remains to be significantly improved. High purity is in strong demand for circulating tumor cell enumeration, molecular characterization, and functional assays with less background intervention from white blood cells,” the authors wrote in their paper.

How the Device Works

The scientists say their system leverages “size-dependent inertial migration” of cells. According to the news release:

  • Blood passes through “microchannels” formed in plastic in the device;
  • “Inertial migration and shear-induced diffusion” separate cancer cells from blood;
  • Tiny differences in size determine a cell’s attraction to a location; and
  • Cells separate to column locations as the liquid moves.

In other words, the device works as a filter sorting out, in blood samples, the circulating tumor cells based on their unique size, New Atlas explained.

93% of Cancer Cells Recovered by Device

When the researchers tested their new device:

  • Researchers placed 10 small-cell-lung cancer cells into five-milliliter samples of healthy blood;
  • The blood was then flowed through the device; and
  • 93% of the cancer cells were recovered.

“A 7.5 milliliter tube of blood, which is typical volume for a blood draw, might have 10 cancer cells and 35- to 40-billion blood cells. So, we are really looking for a needle in a haystack,” Papautsky stated in the news release.

The graphic above illustrates how, in the lab, the microfluidic device enabled the researchers to separate out cancer cells in six of the eight lung cancer samples they studied. (Graphic copyright: Ian Papautsky, PhD/University of Illinois at Chicago/New Atlas.)

“We report on a novel multi-flow microfluidic system for the separation of circulating tumor cells with high purity. The microchannel takes advantage of inertial migration of cells. The lateral migration of cells strongly depends on cell size in our microchannel, and label-free separation of circulating tumor cells from white blood cells is thus achieved without sophisticated sample predation steps and external controls required by affinity-based and active approaches,” the researchers wrote in their paper.

The device could one day aid physicians in precision medicine and the development of targeted treatment plans for patients, reported Genetic Engineering and Biotechnology News.

Other Microfluidic Diagnostic Devices

The researchers plan wider trials and the addition of biomarkers to enable cancer DNA detection, New Atlas reported, which described the UIC/QUT study as part of a “new wave of diagnostics.”

Another novel liquid biopsy approach to cancer detection is under development at the University of Queensland. It involves a unique nano-scale DNA signature that appeared in breast cancer and other cancer studies. (See, “University of Queensland Researches May Have Found a Universal Biomarker That Identifies Cancer in Various Human Cells in Just 10 Minutes!Dark Daily, May 20, 2019.)

And researchers developed a “labyrinth” label-free microfluidic device that enabled white blood cells and circulating tumor cells to separate during a study at the University of Michigan. (See, “University of Michigan Researchers Use ‘Labyrinth’ Chip Design in Clinical Trial to Capture Circulating Tumor Cells of Different Cancer Types,” Dark Daily, February 2, 2018.)

With so much focus on liquid biopsy research, it may be possible for medical laboratories to one day not only diagnose cancer through blood tests, but also to find the disease earlier and in a more precise way than with traditional tissue sample analysis.

—Donna Marie Pocius

Related Information:

New Microfluidic Device Can Detect Cancer Cells in Blood

Microfluidic Device Promises Cheap and Fast Detection of Cancer Cells in Blood

Isolation of Circulating Tumor Cells in Non-Small-Lung Cancer Patients Using a Multi-Flow Microfluidic Channel

Liquid Biopsies Become Cheap and Easy with New Microfluidic Device

University of Queensland Researchers May Have Found a Universal Biomarker that Identifies Cancer in Various Human Cells in Just 10 Minutes

University of Michigan Researchers Use Labyrinth Chip Design in Clinical Trial to Capture Circulating Tumor Cells of Different Cancer Types

Dark Daily: Liquid Biopsy

DOJ Pursues Organizations That Falsely Claim Compliance with Medicare’s EHR Incentive Programs

Clinical laboratories that interface with hospital EHR systems under scrutiny by the DOJ could be drawn into the investigations

Officials at the federal US Department of Justice (DOJ) continue to pursue fraud cases involving health systems that allegedly have falsely attested to complying with the Medicare and Medicaid electronic health record (EHR) adoption incentive programs (now known as the Promoting Interoperability Programs).

This is important for clinical laboratory leaders to watch, because medical labs often interface with hospital EHRs to exchange vital patient data, a key component of complying with Medicare’s EHR incentive programs. If claims of interoperability are shown to be false, could labs engaged with those hospital systems under scrutiny be drawn into the DOJ’s investigations?

Violating the False Claims Act

In May, Coffey Health System (CHS), which includes Coffey County Hospital, a 25-bed critical access hospital located in Burlington, Kan., agreed to pay the US government a total of $250,000 to settle a claim that it violated the False Claims Act.

CHS’ former CIO filed the qui tam (aka, whistleblower) lawsuit, which allows individuals to sue on behalf of the government and share in monetary recovery. He alleged that CHS provided false information to the government about being in compliance with security standards to receive incentive payments under the EHR Incentive Program.

According to a DOJ press release, “the United States alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with requirements under a federal incentive program for the reporting periods of 2012 and 2013. The government contended that the hospital submitted false claims to the Medicare and Medicaid Programs pursuant the Electronic Health Records (EHR) Incentive Program.”

“Medicare and Medicaid beneficiaries expect that providers ensure the accuracy and security of their electronic health records,” said Stephen McAllister (above), United States Attorney for the District of Kansas, in the DOJ press release. “This office remains committed to protecting the federal health programs and to hold accountable those whose conduct results in improper payments.” (Photo copyright: US Department of Justice.)

How Providers Receive EHR Incentive Program Funds

The original EHR Adoption Incentive Program was part of the Health Information Technology for Economic and Clinical Health (HITECH) Act. The federal government enacted the program as part of the American Recovery and Reinvestment Act of 2009 (the Recovery Act), which was an amendment to the Health Insurance Portability and Accountability Act (HIPAA). 

The Recovery Act allocated $25 billion to incentivize healthcare professionals and facilities to adopt and demonstrate meaningful use (MU) of electronic health records by January 1, 2014. The federal Centers for Medicare and Medicaid Services (CMS) released the incentive funds when providers attested to accomplishing specific goals set by the program.

The website of the Office of the National Coordinator for Health Information Technology (ONC), HealthIt.gov, defines “meaningful use” as the use of digital medical and health records to:

  • Improve quality, safety, efficiency, and reduce health disparities;
  • Engage patients and their families;
  • Improve care coordination and population and public health; and
  • Maintain privacy and security of patient health information.

The purpose of the HITECH Act was to address privacy and security concerns linked to electronic storage and transference of protected health information (PHI). HITECH encourages healthcare organizations to update their health records and record systems, and it offers financial incentives to institutions that are in compliance with the requirements of the program.

When eligible professionals or eligible hospitals attest to being in compliance with Medicare’s EHR incentive program requirements, they can file claims for federal funds, which are paid and audited by the Department of Health and Human Services (HHS) through Medicare and Medicaid.

Institutions receiving funds must demonstrate meaningful use of EHR records or risk potential penalties, including the delay or cancellation of future payments and full reimbursement of payments already received. In addition, false statements submitted in filed documents are subject to criminal laws and civil penalties at both the state and federal levels.

EHR Developers Under Scrutiny by DOJ

EHR vendors also have been investigated and ordered to make restitutions by the DOJ. 

In February, Greenway Health, a Tampa-based EHR developer, agree to pay $57.25 million to resolve allegations related to the False Claims Act. In this case, the government contended that Greenway obtained certification for its “Prime Suite” EHR even though the technology did not meet the requirements for meaningful use.

And EHR vendor eClinicalWorks paid the government $155 million to settle allegations under the False Claims Act. The government maintained that eClinicalWorks misrepresented the capabilities of their software and provided $392,000 in kickbacks to customers who promoted its product. 

Legal cases such as these demonstrate that the DOJ will pursue both vendors and healthcare organizations that misrepresent their products or falsely attest to interoperability under the terms laid out by Medicare’s EHR Incentive Program.

Clinical laboratory leaders and pathology groups should carefully study these cases. This knowledge may be helpful when they are asked to create and maintain interfaces to exchange patient data with client EHRs.

—JP Schlingman

Related Information:

DOJ Pursues More Electronic Health Records Cases

Electronic Health Records Vendor to Pay $57.25 Million to Settle False Claims Act Allegations  

Electronic Health Records Vendor to Pay $155 Million to Settle False Claims Act Allegations

Kansas Hospital Agrees to Pay $250,000 to Settle False Claims Act Allegations

EHR Sales Reached $31.5 Billion in 2018 Despite Concerns over Usability, Interoperability, and Ties to Medical Errors

Humana’s New Oncology Value-based Care Program Includes Quality and Cost Measurements of Provider Performance, Clinical Laboratories, and Pathology Groups

“Pathologists and medical laboratories may have to demonstrate efficiency and effectiveness to stay in the insurer’s networks and get paid for their services

In recent years, Medicare officials have regularly introduced new care models that include quality metrics for providers involved in a patient’s treatment. Now comes news that a national health insurer is launching an innovative cancer-care model that includes quality metrics for medical laboratories and anatomic pathology groups that deliver diagnostic services to patients covered by this program.

Anatomic pathologists and clinical laboratories know that cancer patients engage with many aspects of healthcare. And that, once diagnoses are made, the continuum of cancer care for these patients can be lengthy, uncomfortable, and quite costly. Thus, it will be no surprise that health insurers are looking for ways to lower their costs while also improving the experience and outcomes of care for their customers.

To help coordinate care for cancer patients while simultaneously addressing costs, Humana, Inc., (NYSE:HUM) has started a national Oncology Model-of-Care (OMOC) program for its Medicare Advantage and commercial members who are being treated for cancer, Humana announced in a press release.

What’s important for anatomic pathologists and clinical laboratories to know is that the program involves collecting performance metrics from providers and ancillary services, such as clinical laboratory, pathology, and radiology. These metrics will determine not only if doctors and ancillary service providers can participate in Humana’s networks, but also if and how much they get paid.

Anatomic pathologists and medical laboratory leaders will want to study Humana’s OMOC program carefully. It furthers Humana’s adoption of value-based care over a fee-for-service payment system.

How Humana’s OMOC Program Works

According to Modern Healthcare, “Humana will be looking at several measures to determine quality of cancer care at the practices including inpatient admissions, emergency room visits, medications ordered, and education provided to patients on their illness and treatment.”

As Humana initiates the program with the first batch of oncologists and medical practices across the US, it also will test performance criteria that anatomic pathologist groups will need to meet to participate in the insurer’s network and be paid for services.

The insurer’s metrics address access to care, clinical status assessments, and patient education. Physicians can earn rewards for enhancing their patients’ navigation through healthcare, while addressing quality and cost of care, reported Health Payer Intelligence.

“The experience for cancer care is fragmented,” Bryan Loy, MD (above), Corporate Medical Director of Humana’s Oncology, Laboratory, and Personalized Medicine Strategies Group, told Modern Healthcare. Loy is board-certified in anatomic and clinical pathology, as well as hematology. “Humana wants to improve the patient experience and health outcomes for members. We are looking to make sure the care is coordinated.” (Photo copyright: National Lung Cancer Roundtable/American Cancer Society.)

Humana claims its OMOC quality and cost measurements are effective in the areas of:

  • inpatient admissions,
  • emergency room visits,
  • medical and pharmacy drugs,
  • laboratory and pathology services, and
  • radiology.

To help cover reporting and other costs associated with participation in the OMOC program, Humana is offering physician practices analytics data and care coordinating payments, notes Modern Healthcare.

“The practices that improve their own performance over a one-year period will see the care coordination fee from Humana increase,” Julie Royalty, Humana’s Director of Oncology and Laboratory Strategies, told Modern Healthcare.

Value-Based Care Programs are Expensive

Due to the cost of collecting data and increasing staff capabilities to meet program parameters, participating in value-based care models can be costly for medical practices, according to Scottsdale, Ariz.-based Darwin Research Group (DRG), which studies emerging payer models.

Some of the inaugural medical practices in the Humana OMOC include:

  • Southern Cancer Center, Alabama;
  • US Oncology Network, Arizona;
  • Cancer Specialists of North Florida;
  • Michigan Healthcare Professionals;
  • University of Cincinnati Physicians Company; and
  • Center for Cancer and Blood Disorders, Texas.

Other Payers’ Value-Based Cancer Care Programs

“Depending upon which part of the country you’re in, alternative payment models in oncology are becoming the norm not the exception,” noted the DRG study. “Humana is a little late to the party.”

Darwin Research added that Humana may realize benefits from having observed other insurance company programs, such as:

Humana is not the only payer offering value-based cancer care programs. The Centers for Medicare and Medicaid Services (CMS) Oncology Care Model is a five-year model (2016 through 2021) involving approximately 175 practices and 10 payers throughout America (see above). The healthcare networks and insurers have made payment arrangements with their patients for chemotherapy episode-of-care services, noted a CMS fact sheet. (Graphic copyright: Centers for Medicare and Medicaid Services.)

Humana’s Other Special Pay Programs

Humana has developed other value-based bundled payment programs as well. It has episode-based models that feature open participation for doctors serving Humana Medicare Advantage members needing:

  • total hip or knee joint replacement (available nationwide since 2018); and
  • spinal fusion surgery (launched in 2019).

Humana also started a maternity episode-of-care bundled payment program last year for its commercial plan members.

In fact, more than 1,000 providers and Humana value-based relationships are in effect. They involve more than two-million Medicare Advantage members and 115,000 commercial members.

Clearly, Humana has embraced value-based care. And, to participate, anatomic pathology groups and medical laboratories will need to be efficient and effective in meeting the payer’s performance requirements, while serving their patients and referring doctors with quality diagnostic services.

—Donna Marie Pocius

Related Information:

Humana Launches Oncology Model of Care Program to Improve the Patient Experience and Health Outcomes in Cancer Care

Humana Launches Oncology Payment Model

Humana Launches Value-based Care Oncology Program for MA Members

Humana Launches New Oncology Payment Model

CMS Fact Sheet: Oncology Care Model

Humana Launches Value-based Model for Cancer Patients

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