Preparing Clinical Laboratories for Invasive Federal Enforcement of Fraud and Abuse Laws, Increased Scrutiny by Private Payers, New Education Audits, and More
Medical laboratory leaders need to take opportunities to stay abreast of government and payer activity, particularly as payer audits become tougher, say legal experts
Even compliant clinical laboratories and anatomic pathology groups are reporting tougher audits and closer scrutiny of the medical lab test claims they submit for payment. This is an unwelcome development at a time when falling lab test prices, narrowing networks, and more prior-authorization requirements are already making it tough for labs to get paid for the tests they perform.
Clinical laboratory leaders can expect continued scrutiny of their labs’ operations and financials as government and commercial payers move forward with invasive programs and policies designed to ferret out fraud and bad actors.
Federal officials are focusing their investigations on healthcare providers who mismanage or inappropriately use Medicare and Medicaid programs, while commercial payers are closely scrutinizing areas such as genetic testing prior authorization, say healthcare attorneys with Cleveland Ohio-based McDonald Hopkins, LLC.
“The government is looking at fraud, waste, and abuse, and all the different ways they come into play,” said Elizabeth Sullivan, Esq., a Member and Co-Chair of the firm’s Healthcare Practice Group, in an exclusive interview with Dark Daily. “We anticipate there will be more enforcement [of fraud and abuse laws] centered around different issues—anything that can be a false claim.”
Specifically, government officials will key in on violations of the Stark Law, EKRA (the Eliminating Kickback in Recovery Act of 2018), and other anti-kickback statutes and laws, Sullivan said.
“And clinical laboratories, by virtue of the type of services and service arrangements they offer, will continue to be a target,” she added.
Medical laboratory leaders also must prepare for aggressive tactics by insurance companies. “On the commercial side, payers are getting more aggressive and more willing to take things to ligation if they don’t get what they want and don’t see a settlement that satisfies their concerns over issues,” said Courtney Tito, Esq., also a Member with McDonald Hopkins, in the Dark Daily interview.
Current Investigations Likely to Impact Clinical Laboratories
Sullivan and Tito advise clinical labs to be aware of the following issues being fast-tracked by government and private payers:
- Targeted Probe and Educate (TPE) audits;
- Genetic testing scams and federal charges for fraud;
- Criminal behavior as defined by the latest Centers for Medicare and Medicaid Services (CMS) final rule;
- EKRA (Eliminating Kickback in Recovery Act of 2018).
The TPE audits program, according to CMS, is focused on providers with high claim error rates or unusual billing practices. During a TPE, a Medicare administrative contractor (MAC) works with a provider to identify and correct errors.
“The TPE audits are real hot right now. We are seeing a lot of clients go through this,” Tito said.
Feds Crack Down on Genetic Testing Fraud Schemes
Genetic testing is another “hot button” issue for enforcement by government and private payers, Sullivan and Tito state.
In fact, the US Department of Justice (DOJ) and the US Department of Health and Human Services (HHS) in September announced charges against 35 people including nine physicians for allegedly participating in healthcare fraud schemes involving genetic cancer testing of seniors nationwide, states a DOJ news release.
CMS is taking action against testing companies and practitioners who submitted more than $1.7 billion in claims to Medicare, the statement added.
The scheme involved medical laboratories conducting the genetic tests, McDonald Hopkins noted in an Alert about the DOJ investigation. The alert described how the scam operated:
- Scam recruiters approached Medicare beneficiaries at health fairs;
- In exchange for a DNA sample (in the form of a cheek swab) and a copy of the victim’s driver’s license, the “representative” offered a free genetic test;
- Representatives allegedly asked the seniors’ doctors to sign-off on test orders. If the seniors’ physicians refused, the scammers offered kickbacks to doctors already in their group;
- Clinical laboratories that performed the tests were reimbursed from Medicare and, allegedly, shared the proceeds with the scammers.
“Although these opportunities may seem appealing as an additional revenue source for providers, it is always important to review the regulatory requirements as well as the potential anti-kickback statute and Stark implications for any new arrangement,” Sullivan and Tito wrote in the McDonald Hopkins Alert article.
Criminal Behavior in CMS Programs
Effective Nov. 4, 2019, CMS issued a final rule intended to stop fraud before it happens by keeping “unscrupulous providers” out of the federal healthcare programs in the first place, states a CMS news release.
The rule (CMS-6058-FC), called “Program Integrity Enhancements to the Provider Enrollment Process,” has new revocation and denial authorities to stop waste, fraud, and abuse, the news release points out.
Reasons CMS can revoke or deny enrollment to providers, according to another McDonald Hopkins Alert, include:
- Outstanding debt to CMS following overpayment to the provider;
- Coming back into CMS programs with a new identity;
- Billing for services from non-compliant locations;
- Abusive ordering or certifying under Medicare Part A or Medicare Part B.
Additionally, EKRA establishes “criminal penalties for unlawful payments for referrals to recovery homes and clinical treatment facilities,” Dark Daily recently reported. However, as the e-briefing points out, it is unclear whether EKRA applies to clinical laboratories.
Nevertheless, Sullivan points out that, “Even without EKRA, the anti-kickback statute applies to any arrangement between individuals. And, it is good to have an attorney look at those arrangements. What your sales reps are doing in the field, how they are communicating, and their practices warrant oversight. EKRA just makes it all the more important.”
Clinical Laboratories Need Compliance Plan, Focus on Payers
With so many legal requirements and payer programs, Sullivan advises medical labs and pathology group practices to work with resources they trust and to have a compliance plan at the ready. “Have resources in place, including but not limited to a compliance officer, a committee, and someone who is spending time on these issues. Monitoring government enforcement and payer activity is the most critical,” she said.
To assist labs in remaining fully informed on these critical compliance topics, and the federal government’s latest legislation to combat fraud, Dark Daily is offering a webinar on November 20th at 1pm Eastern time. Sullivan and Tito will offer their insights and advice on how labs should prepare for CMS’ battle to reign in fraud and commercial payers’ increased scrutiny into prior authorizations.
Clinical laboratory leaders, compliance officers, and finance staff will benefit greatly from this crucial resource.
Register for “Bracing for Aggressive Payer Audits, Rigid Enforcement of Fraud and Abuse Laws, and More” at https://www.darkdaily.com/product/payor-audits-webinar/ or by calling 512-264-7103.
—Donna Marie Pocius
Related Information:
OIG Focusing on Laboratories Involved in Genetic Testing Scams
CMS Announces New Enforcement Authorities Reduce Criminal Behavior in Medicare, Medicaid, and CHIP
CMS Aims to Combat Criminal Behavior Through Enrollment Process
Does New Opioid Law Require Clinical Laboratories to Change How They Pay Sales Employees?
