Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
COVID is front and center in all aspects of everyday life and has shined light in the strangest of places that were usually in the dark. In healthcare the laboratory space has always taken a backseat to other sectors in terms of recognition and value. The current climate in the lab space has shifted and it is not an illusion, labs are front and center.
COVID has taken its toll on areas of the economy and investors are certainly one of the first to become aware of this situation. Clinical laboratories are currently an attractive acquisition target and the reasons are numerous, sectors like retail, entertainment and travel are performing poorly and investors are shifting their investment dollars into healthcare and technology. Investors are looking for growth and profitability and are finding it in healthcare. Mergers and Acquisitions (M&A) is nothing new in the lab industry, but now careful consideration is required when it comes to deciding the appropriate time to sell your lab.
The Office of Inspector General (OIG) and other Federal agencies charged with responsibility for enforcement of Federal law have emphasized the importance of voluntarily developed and implemented compliance plans. The government, especially the OIG, has a zero- tolerance policy towards fraud and abuse and uses its extensive statutory authority to reduce fraud in Medicare and other federally funded health care programs. The OIG believes that through a partnership with the private sector, significant reductions in fraud and abuse can be accomplished. Compliance plans offer a vehicle to achieve that goal. The OIG has provided a model compliance plan for clinical laboratories to assist laboratory providers in crafting and refining their own compliance plans.
The OIG suggests that the comprehensive compliance program should include the following elements:
Congress passed the Clinical Laboratory Improvement Amendments (CLIA) in 1988. CLIA established quality standards for all laboratory testing to ensure the accuracy, reliability, and timeliness of patient test results regardless of where the test was performed. In 2003, the Centers for Disease Control and Prevention (CDC) and the Centers for Medicare and Medicaid Services (CMS) published the CLIA Quality Systems laboratory regulations. The quality system approach includes a laboratory’s policies, processes, procedures, and resources needed to obtain consistent, high quality testing services.
The laboratory must be under the direction of a qualified person and that person must fulfill all responsibilities of the lab director as outlined by CLIA. CLIA prohibits a laboratory director from directing more than five non-waived laboratories. Some states may have additional restrictions regarding the number of labs the lab director can direct. The lab director must meet education and experience requirements to hold the position and meet all requirements of the position. The responsibilities include ensuring that there are sufficient personnel with adequate experience and training and make sure that every position in the lab is staffed by a person who is qualified to have the position and can perform all tasks required of the position. read more
Effective July 1, 2018, Florida’s recent legislation SB 622 repeals the entirety of Chapter 483, Part I of the Florida statutes, and removes the state licensure requirement for clinical laboratories operating in-state and out-of-state. Section 97 of SB 622, approved by the Governor on March 19, 2018, repeals the entirety of Chapter 483, Part I of the Florida statutes, and so eliminates section 59A-7.024(1). read more
A recent whistleblower action (by UnitedHealthcare Medical Director, Tina Groat) against Boston Heart (laboratory) was brought under the federal False Claims Act and deals with medical necessity issues. As part of the analysis, the Court reviewed whether a laboratory [or supplier like DME] must determine the medical necessity of the ordering physician. Boston Heart contended that a doctor, not a laboratory, determines the medical necessity of a test. Boston Heart argued that when a laboratory bills Medicare for testing ordered by a physician, it must only maintain documentation it receives from the ordering physician and ensure that the information that it submitted with the claim accurately reflects the information it received from the ordering physician. It noted that the CMS-1500 form certification does not require that the billing lab to make the medical necessity determination. The lab certifies that the services are medically necessary by relying on the clinical determination of the treating physician. read more
If you have ever been the recipient of a Florida state agency’s (i.e. Department of Health, AHCA, etc.) notice regarding an adverse action, such as a Notice of Intent to Deny, licensure application, renewal or change of ownership, you probably received an Election of Rights form along with the agency’s notice. The Election of Rights form must be completed and returned to the agency within 21 days of receiving the agency’s notice. In completing the Election of Rights form, you are given three options to choose from in deciding how you want to respond to the agency’s notice.
Under Option One you admit to the allegations of facts and law contained in the agency’s notice of intended action and waive the right to object and have a hearing. This is akin to an admission of guilt, that the agency is right in its decision, and you agree to a final order that supports the agency’s actions, including imposition of fines and punishment against you. Option One is generally not in your best interest. read more
When a healthcare provider cares for a patient, many times, the provider will set out directives for the patient to follow in order to live a healthier life. These changes may include changes in lifestyle, eating habits, and obedience in taking medications. A patient’s compliance with these directives instructs the provider on how to care for the patient in the future. A patient who does not follow these directives may suffer health consequences.
Similarly, the government sets out legal regulations for healthcare providers. The government expects healthcare providers to comply with its regulations, and providers who don’t can suffer consequences as a result. The regulations governing health care providers are vast and dynamic. In order to keep abreast of the changes in law, and to evidence an intent to comply with law, healthcare providers should strongly consider instituting compliance programs in their businesses.
Compliance with healthcare laws is important. Any number of consequences can result in the event that a healthcare provider is out of compliance—the most devastating being that the Department of Health and Human Services Office of the Inspector General (“OIG”) has the authority to exclude healthcare providers from participation in Medicare and other federal health care programs. Ignorance of the law does not absolve a healthcare provider of liability. read more
Medical Directors are used in an administrative capacity to oversee all medical services and care, specifically referring to substance abuse programs and services. Increasingly, commercial healthcare plans are targeting their role in addictions treatment facilities and denying payment of claims based on audit findings that Medical Directors in Florida may be responsible for far too many treatment facilities and too many patients.
Does Florida have any specific requirements or published guidance on the number of treatment facilities or number of patients for which responsibility falls to the Medical Directors in addictions treatment?
Florida’s Administrative Code directed to substance abuse programs and services does not have any directive which talks about a restriction on the number of facilities or patients recommended for oversight by a Medical Director. It specifies that addictions receiving facilities, detoxification, intensive inpatient treatment, residential treatment, day or night treatment with host homes and medication and methadone maintenance treatment must designate a Medical Director who oversees all medical services. This Medical Director must hold a current license in the state of Florida. read more
The Office of Inspector General of the Department of Health and Human Services today issued a Special Fraud Alert pertaining to relationships between laboratories and referring physicians. Payments from labs to physicians who refer were targeted in the Alert. The Alert also reiterates their suspicion of so-called “carve out” compensation relationships where state and federal healthcare program dollars are removed from the payment formula (which was previously addressed last year in Advisory Opinion 13-03). While the Alert does not add anything new to the government’s view of such relationships, it does underscore the very suspect view the OIG has of payment relationships between labs and the physicians who refer to them. Careful compliance with the Personal Services and Management Contracts Safe Harbor continues to be a core concern.
When a physician cannot bill for test results, and a company offers to give that physician those test results for free, a Florida Federal Court has ruled that the company is offering the physician prohibited remuneration. On May 5, 2014 the Middle District of Florida granted partial summary judgment on the latest motion in a contentious litigation between Ameritox Ltd. and Millennium Laboratories, Inc. Ameritox and Millennium are competitors and clinical laboratories that screen urine specimens for the presence of drugs.
Millennium provided free point of care testing cups to physicians, who use the cups for initial testing and then return the cups back to Millennium for confirmation tests. Physicians do not bill patients or insurance companies for the point of care tests. read more