It seems that clinical laboratories are under more scrutiny now than ever before. Whether it is the testing for COVID-19 performed during the public health emergency or the urine drug screens performed as part of patient compliance monitoring for pain management and substance use disorder treatment programs or just routine panels ordered by primary care providers, an audit is going to come. And, the burden has never been heavier on laboratory providers to establish that they have an effective corporate compliance program to ensure the provider is not engaging in practices deemed to be fraudulent, wasteful, or abusive to governmental payors.
In March 1997, the Department of Health and Human Services’ Office of the Inspector General (OIG) published its first model voluntary corporate compliance program for clinical laboratories. The model plan is instructive as it provides keen insight into the government’s general views toward a health care provider’s responsibilities to combat health care fraud, waste, and abuse within its own company – and, sometimes, outside of it. Significantly, the OIG model plan sets forth its concept that a clinical laboratory is responsibility for monitoring and educating medical providers with respect to the ordering of medically necessary tests.
In this day and age, corporate compliance programs are a must, even for non-laboratory providers. Federal statutes like the Stark Law carry monetary penalties that can become massive in a hurry, and the federal Anti-Kickback Statute contains a criminal component in addition to its own large financial penalties. By establishing and maintaining an effective compliance program, healthcare entities can seek to avoid violations of state and federal healthcare laws – especially those laws that can land them in prison, and good compliance programs can reduce certain criminal penalties in the event that violations do occur.
While the OIG’s model compliance plan for clinical laboratories is deemed “voluntary,” best practice would be to adopt as many of the OIG’s recommendations as possible. This is like the teacher telling you exactly what is going to be on the final exam. Failing to heed this warning can only work against anyone who is later found to be noncompliant. Some significant aspects of the model compliance plan include:
- written standards of conduct for employees;
- the development and distribution of written policies that promote the lab’s top-down commitment to compliance and that address specific areas of potential risk for fraud, waste, or abuse, including billing and marketing;
- the designation of a compliance officer and/or compliance committee who charged with the responsibility of operating and overseeing the program;
- the development and offering of compliance-based educational and training programs to all employees;
- the use of audits and other evaluation techniques to monitor compliance and ensure reduction in identified problem areas;
- the development of a code of improper/illegal activities and the use of disciplinary action against employees who violate the compliance policies (or applicable laws);
- the investigation and remediation of identified systemic and personnel problems;
- the promotion of and adherence to compliance as an element in evaluating supervisors and managers;
- the development of policies addressing the non-employment or retention of sanctioned (or excluded) individuals;
- the maintenance of a hotline to receive compliance-related complaints and the adoption of procedures to protect the anonymity of complainants; and
- the adoption of recordkeeping and retention requirements.
As my other laboratory clients have worked to build and maintain their own effective compliance programs, one of the concerns I have repeatedly heard is with regard to a laboratory’s legal responsibilities for the determination of “medical necessity.” Specifically, the OIG holds that “laboratory compliance plans should ensure that claims are only submitted to federally funded health care programs for services that the laboratory has reason to believe are medically necessary.” While acknowledging that licensed medical providers, and not labs, make the decisions regarding medical necessity, the OIG nevertheless suggests that labs must assume some responsibility for ensuring that “claims are only submitted to federally funded health care programs for services that the laboratory has reason to believe are medically necessary.”
Figuring out how to address all these proposed responsibilities and duties can be overwhelming and extremely time consuming – especially if you are starting from scratch. However, laboratories cannot wait to begin addressing these issues, as one never knows when an unannounced audit will come. With compliance in mind, laboratory providers who have not already done so will want to immediately begin developing and implementing compliance programs, including policies and provider agreements, consistent with the OIG’s model plan.
If you need assistance with this process, we can help! Bowles Rice LLP maintains an experienced Health Care Practice Group that is ready to assist healthcare providers in addressing their most pressing compliance concerns.