Laboratory Compliance

Laboratories nationwide are overwhelmed with increased diagnostic testing volume while simultaneously managing regulatory changes in light of the COVID-19 pandemic. It is more essential than ever for clinical laboratories to enforce regulation, have a compliance plan in place and develop or enhance operational policies. Our firm has legal lab experts with ‘insider’ healthcare business knowledge to help keep your business compliant while adapting to the rapidly changing healthcare landscape.

Articles from Our Team

By: Dean Viskovich

What options do doctors have in determining if a patient has the flu or COVID-19?

The days of assuming a sniffle and low fever during the Fall are just signs of the common flu are long gone. The challenge doctors now face is determining whether a cough, temperature and sore throat is the flu or COVID-19. If the symptoms are essentially the same for both illnesses, what’s a doctor to do?  In the old days before Fall of 2019, a doctor would order a lab test to see if the patient tested positive for the flu. Today, a doctor who is faced (in person or virtually) with a patient with fever, chills, cough, runny nose, headaches and fatigue now must know if it is the seasonal flu or COVID-19. Ordering a COVID-19 test may seem like the obvious choice, but a more efficient alternative exists. Instead of a standalone COVID-19 test, ordering a comprehensive respiratory pathogen panel is a better decision.

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By: Dean Viskovich

COVID-19 has affected all aspects of everyday life and healthcare rules and regulations are no exception.  All areas of healthcare have been impacted, including the patient’s financial responsibility for healthcare services in the form of co-insurance, copays and deductibles. The waiver of a patient’s financial responsibility for healthcare services is regulated by federal and state law. The waiver of co-pays, co-insurance and deductibles has been deemed a violation of the federal Anti-Kickback statue.  A provider who routinely waives the patient’s financial obligation may be violating the participating provider agreement with commercial carriers, state law and federal law with respect to Medicare beneficiaries.  Waiving patient fees is seen as an inducement to the patient to prefer one provider over another for financial reasons. However, The Centers for Medicare and Medicaid Services (CMS) and commercial carriers have been authorized by the federal government to waive patient financial responsibility during the pandemic in order to encourage the public to get treated for COVID-19 and non-COVID medical conditions without fear of a hefty bill.

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On October 6, 2020, the Unites States Attorney’s Office of the Western District of Louisiana announced that George M “Trey” Fluitt III of Monroe, Louisiana was indicted.  The federal grand jury indicted the lab owner for paying bribes and kickbacks in violation of the Anti-Kickback Statute, resulting in improper Medicare billing of approximately $117 million. Fluitt was the owner and operator of Specialty Drug Testing, LLC and is alleged to have solicited paid kickbacks and bribes in return for patient DNA specimens and physicians’ orders for cancer genetic and pharmacogenetic testing. Medicare allegedly paid Specialty Drug Testing, LLC $28,726,299 as a result of the fraudulent claims. If convicted, the defendant faces up to five years in prison for each count of conspiracy to defraud a healthcare program.  Fluitt also faces 10 years in prison for illegal kickbacks, a $250,00 fine, forfeiture and restitution.

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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

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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.

By: Dean Viskovich

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.

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By: Dean Viskovich

On November 13, 2020 Centers for Medicare and Medicaid Services (CMS) announced that all Americans will have access to the COVID-19 vaccine at no cost.  CMS has clearly communicated to private insurers, Medicaid programs and Medicare that it is their responsibility to cover the vaccine at no charge to beneficiaries.  CMS states that Operation Warp Speed ensures that States, provider’s and health plans have the information and direction they need to ensure broad vaccine access and coverages for all.  As a condition of receiving free COVID-19 vaccines from the federal government, providers will be prohibited from charging consumers for administration of the vaccine.

Beneficiaries with Medicare will not pay anything for the COVID-19 vaccine and their coinsurance/copayment and deductible amounts will be waived.  In 2021, for Medicare Advantage beneficiaries, Medicare will pay directly for the vaccine and its administration for those enrolled in MA plans.  MA plans are not responsible for reimbursing providers to administer the vaccine.  MA beneficiaries do not pay for the vaccine and copayment/coinsurance and deductibles are waived.

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By: Dean Viskovich

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:

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Legal Insight

  • Laboratory regulatory compliance & operations
  • Laboratory compliance programs & plans
  • Laboratory licensure, accreditation & certification
  • Lab billing, reimbursement, charge-master review, CPT, ICD-10, HCPC coding & audits
  • Education & training programs designed for OIG compliance
  • General Counsel on per project basis for independent clinical labs or physician-owned labs
  • Requisition form revisions, testing menu expansion for COVID-19

We specialize in diagnostic laboratory testing, infectious disease, PGX, clinical, toxicology, Laboratory Information Services (LIS), comprehensive coding, medical billing and financial services for revenue cycle management.

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A laboratory compliance program is an essential tool that should be designed to:

  1. give ownership and staff a working understanding of the law;
  2. provide a framework for the laboratory to comply with applicable laws; and
  3. guide your laboratory through a process when a compliance issue arises in order to bring that issue to resolution.

The OIG has published Compliance Program Guidance documents for various kinds of healthcare providers, including laboratories. The areas of focus and legal basis for developing a laboratory compliance program are found in the Social Security Act (Medicare and Medicaid), Anti-kickback Statute (AKS), False Claims Act (FCA), Physician Self-Referral Act (Stark), Health Insurance Portability and Accountability Act (HIPAA) and Eliminating Kickback in Recovery Act (EKRA). With this many regulations, laws, ethical business practices and standards to consider, staying in full compliance requires diligent efforts and the support of a highly skilled team.

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We advise laboratories on a variety of legal matters such as federal and state regulations and laws such as the Clinical Laboratory Improvement Amendments (CLIA), Stark Law, Anti-Kickback, False Claims Act, EKRA and Fraud and Abuse.

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