Laboratories that bill Medicare, Medicaid, Tricare, the Veteran’s Administration (VA), the U.S. Department of Labor (DOL), and private insurers need to make compliance a top priority. Our team of federal health care lawyers brings centuries of combined experience to helping labs stay compliant.
In today’s world of aggressive federal health care law enforcement, laboratories are increasingly finding themselves under the microscope. Federal authorities including the Centers for Medicare and Medicaid Services (CMS), the Department of Defense (DOD), the Department of Justice (DOJ), the Department of Labor (DOL), and the Department of Health and Human Services’ Office of Inspector General (OIG) are targeting labs for a broad range of federal offenses; and, in many cases, lab owners and executives are facing criminal culpability. However, it is often possible to avoid charges by executing a strategic defense, and implementing an effective compliance program is a critical first step toward mitigating the risk of an indictment and sentencing at trial.
Put our highly experienced team on your side
Brian J. Kuester
Former U.S. Attorney
Former DA
Amanda Marshall
Former U.S. Attorney
Local Counsel
Joe Brown
Former U.S. Attorney
& Former District Attorney
Local Counsel
John W. Sellers
Former Senior Trial Attorney
U.S. Department of Justice
Local Counsel
Linda Julin McNamara
Former Chief, DOJ Appeals
Local Counsel
Joanne Fine DeLena
Former Assistant U.S. Attorney
Local Counsel
Aaron L. Wiley
Former Federal Prosecutor
Local Counsel
Roger Bach
Former Special Agent (OIG)
Chris Quick
Former Special Agent (FBI & IRS-CI)
Kevin M. Sheridan
Former Special Agent (FBI)
Ray Yuen
Former Supervisory Special Agent (FBI)
Dennis A. Wichern
Former Special Agent-in-Charge (DEA)
Federal Health Care Compliance Attorneys Serving Laboratories Nationwide
At The Criminal Defense Firm, we provide compliance representation for laboratories across the country. We assist clients with all aspects of federal health care compliance, including compliance with the Medicare, Medicaid, Tricare, Veteran’s Administration (VA), and DOL billing regulations. From assessing your lab’s needs to assisting with employee training and compliance program enforcement, we provide full-service representation that we custom-tailor to the unique aspects of each of our clients’ businesses.
Our attorneys represent all types of labs with regard to federal health care compliance nationwide, including:
- CGX and PGX testing labs
- Diagnostic labs
- Clinical labs
- Genetic testing labs
- Mobile medical labs
- Pathology labs
- Toxicology labs
The Elements of an Effective Laboratory Compliance Program
Just how important is federal compliance for labs? The OIG has publicly stated that it and other federal agencies are “emphasiz[ing] the importance of voluntarily developed and implemented compliance plans.” The Introduction to the OIG’s Model Compliance Plan for Clinical Laboratories continues:
“The government, especially the OIG, has a zero tolerance policy towards fraud and abuse and will use its extensive statutory authorities to reduce fraud in Medicare and other federally funded health care programs. Compliance plans offer the health care provider an opportunity to participate in a nationwide effort to reduce fraud and abuse in our national health care programs. . . . Every laboratory adopting a compliance plan should develop a program and policies that ensure that the plan is implemented and enforced. Compliance plans that are merely cosmetic are not effective and, in the long run, may harm the laboratory.”
In other words, the OIG takes laboratories’ voluntary compliance obligations seriously, and so should you. Although laboratory compliance programs should be carefully and strategically tailored to each individual lab’s needs, the core elements of an effective compliance program (as identified by the OIG) include:
1. Written Procedures and Policies
Written documentation is at the core of any health care fraud compliance program. Procedures and policies must be clearly established, and they must be capable of clear and unambiguous communication to lab personnel. According to the OIG, all federal program-participating laboratories should have written compliance documentation that covers:
- Standards of Conduct Labs should adopt internal standards of conduct that, “clearly delineate the [lab’s] policies . . . with regard to fraud, waste and abuse and adherence to all guidelines and regulations governing federally funded health care programs.”
- Medical Necessity Although the physicians who order lab tests are generally in the best position to determine whether a test meets the applicable standard for medical necessity, the OIG nonetheless requires labs to take appropriate steps, “to help maximize the likelihood that they only bill federally funded health care programs for tests that meet the reimbursement rules for those programs.”
- Billing Billing and coding errors are among the most common issues identified during federal healthcare fraud investigations. Labs must consistently select the appropriate CPT, HCPCS, and ICD-9CM codes, and they must only bill for eligible tests and screenings.
- Reliance on Standing Orders While the OIG acknowledges that standing orders, “are not prohibited in connection with an extended course of treatment,” it also advises that lab compliance plans, “should require the laboratory to monitor existing standing orders to ensure their continuing validity.”
- Compliance with Applicable OIG Fraud Alerts Developing a compliance program is not a one-time event. Changes in federal laws and program billing regulations will require labs to modify their compliance programs from time to time, and the OIG advises that labs, “should require that any and all fraud alerts issued by the OIG are carefully considered by the legal staff, chief compliance officer, or other appropriate personnel.”
- Marketing Laboratories’ marketing materials should be, “clear, correct, non-deceptive and fully informative.” Any deviation from these standards which results in misinformation being spread to patients or physicians has the potential to trigger a federal health care fraud investigation.
- Prices Charged for Physician Profiles Financial relationships with physicians present a host of compliance issues under the False Claims Act, the Anti-Kickback Statute, and various other federal laws. As a result, as part of their compliance efforts, labs must ensure that all agreements are structured with the relevant federal standards and prohibitions in mind.
- Retention of Records In addition to maintaining all documentation required by federal law and federal program regulations, labs should also maintain thorough documentation pertaining to issues such as marketing arrangements and determinations of medical necessity. This documentation should be securely stored in a manner that allows it to be easily retrieved in the event of a federal audit or investigation.
- Compliance as an Element of a Performance Plan In the words of the OIG, “To ensure that corporate integrity rises to the level of importance required of laboratories participating in Medicare or other federally funded health care programs, compliance programs should require that the promotion of and adherence to compliance be an element in evaluating the performance of managers and supervisors.”
2. Designation of a Compliance Officer (or Equivalent)
Once the necessary procedures and policies have been drafted, labs must appoint a compliance officer or committee to oversee their ongoing compliance efforts. The compliance officer or committee should be responsible for the distribution, implementation, and enforcement of the lab’s compliance program in all respects, and should be afforded sufficient time to undertake the necessary compliance efforts. Just as a compliance program cannot be “merely cosmetic,” a compliance officer cannot be a figurehead who does not actually perform the requisite compliance-related functions.
3. Education and Training
All laboratory personnel should receive education and training that are appropriate to their specific role in the lab’s ongoing compliance efforts. The OIG takes the position that, “[t]raining should be conducted at least annually and repeated at regularly scheduled times, using a variety of teaching methods and where appropriate, languages to ensure that all employees fully comprehend the implications of failing to comply with the laboratory’s compliance plan and all applicable health care program requirements.”
4. Communication
The OIG advises that open communication between the compliance officer or committee and lab personnel is “critical” to compliance. Communication procedures and policies should be included in the laboratory’s compliance documentation, and the means of communicating potential compliance violations should be made widely known and widely available throughout the lab.
5. Auditing and Monitoring
“The OIG will be critical of compliance plans and programs that exist on paper but are not earnestly implemented or enforced.” In other words, if your lab is targeted in a federal investigation, you need to be able to prove not only that you have a compliance program, but that you have implemented it effectively. This includes auditing and monitoring compliance efforts on an ongoing basis with a goal of “zero tolerance of fraud and abuse.”
6. Disciplinary Action
The OIG expects laboratories to take disciplinary action against individual employees who are responsible for false and fraudulent billings being submitted to Medicare, Medicaid, Tricare, the VA, and the DOL. To this end, a lab compliance program should include, “a written policy statement setting forth the degrees of disciplinary actions that can be imposed upon employees,” and employees should be, “advised and convinced,” that they will face adverse employment action for compliance violations. The OIG also advises that:
“Compliance programs should prohibit the employment of individuals who have been convicted of a criminal offense related to health care or who are listed by a Federal agency as debarred, excluded or otherwise ineligible for participation in federally funded health care programs. In addition, until resolution of such criminal charges or proposed debarment or exclusion, individuals who are charged with criminal offenses related to health care or proposed for exclusion or debarment should be removed from direct responsibility for or involvement in any federally funded health care program. If resolution results in conviction, debarment or exclusion of the individual, the laboratory should terminate its employment of that individual or company.”
7. Corrective Action
Finally, a laboratory compliance program should specify the means of responding to potential violations. This includes investigation, reporting, and corrective action. As reporting compliance violations has the potential to trigger additional scrutiny from the OIG and other federal authorities, all decisions regarding whether and how to disclose billing mistakes and other issues should be made with the advice of the lab’s federal health care compliance counsel.
Discuss Your Lab’s Compliance Needs with a Federal Health Care Lawyer at The Criminal Defense Firm
As you can see, federal health care compliance is a serious matter for laboratories, and labs’ compliance efforts must be both extensive and highly-customized. To discuss your laboratory’s compliance needs with a federal health care lawyer at The Criminal Defense Firm, call us at 214-251-4238 or request a free initial consultation online today.
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