Nov 6, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory Pathology
Medical laboratory leaders must take steps to protect their lab’s financial stability and know how to prepare and respond to investigations and regulatory threats
Clinical laboratories and anatomic pathology groups may soon face a new normal that includes more frequent and tougher audits by both private payers and the government, resulting in larger monetary demands. The financial strain medical laboratories will experience from more aggressive audits will be compounded by the roll out on January 1, 2018, of new Medicare Part B price cuts.
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland, says audit activity has been “ramping up” during the past 18 months, but has accelerated in recent months.
“We are seeing a dramatic increase in the number of audits and the dollar amount the payers are trying to recoup as a result of those audits,” Cooper said in an interview with Dark Daily, noting monetary demands can reach “seven to eight” figures.
“We’re seeing that with both government payers as well as commercial payers and we’re seeing much more aggressive audit tactics being utilized than we have in the past.”
Payers Put Clinical Laboratories Under Increased Scrutiny
While toxicology/pharmacogenomics and molecular/genetic testing laboratories frequently are the targets of the increased scrutiny, Cooper says no medical laboratory is immune from questioning. The “medical necessity” of providing and billing for diagnostic tests or services, and laboratory waivers of “patient responsibility” for copays and deductibles, are the two most common compliance issues being cited, states Cooper, who points to Cigna, UnitedHealthcare and Blue Cross Blue Shield as among the most active commercial payers his firm encounters.
“There are large dollars at stake and they are going after those dollars,” Cooper explains.
In this new environment, Cooper maintains medical directors and lab executives must:
- Protect the lab’s financial stability in 2018 by considering operational changes and taking other steps to prepare for revenue losses due to PAMA (Protecting Access to Medicare Act).
- Get educated about practices that can trigger audits by commercial payers, or state and federal regulators, and consider conducting self-audits using an independent third-party.
- Know how to respond if a lab is charged with proficiency test violations, which can result in significant penalties from Centers for Medicaid and Medicare Services (CMS), such as loss of a lab’s CLIA license and revocation of the medical director’s license to operate a medical laboratory for two years.
- Expect scrutiny of “piggyback” arrangements with toxicology labs that could raise compliance concerns and violate commercial payer contracts. A “piggyback” arrangement is where a lab bills under the payer contract of another provider because it is unable to contract with the payer directly. This often involves “piggybacking” on lab or hospital (usually Critical Access Hospital) contracts. In many cases, the billing entity does not perform the lab services for which they are billing. The services are instead performed by the non-participating lab, and the billing provider pays most of the collections back to the non-billing laboratory, retaining a fee for using the contracts. There may not be disclosure to the payers about which entity actually performed the test.
Navigating Tougher Clinical Laboratory Laws and Regulations
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins LLC, in Cleveland will be a featured speaker and moderator during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: McDonald Hopkins LLC.)
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST.
Cooper, who will moderate the webinar, will be joined by David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, and Jeffrey J. Sherrin, JD, President and Partner, O’Connell and Aronowitz in Albany, New York.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
Nov 3, 2017 | Laboratory News, Laboratory Operations, Laboratory Pathology
Medical laboratory leaders urged to scrutinize pricing policies, billing decisions, and structural relationships that could trigger commercial payer and regulatory action
Clinical laboratories and pathology groups face another blow to their financial health on January 1, 2018, when new Medicare Part B price cuts take effect. Faced with increasing competition and declining reimbursement rates for anatomic pathology testing, medical laboratories will begin 2018 with their profitability under threat. In addition, healthcare legal experts warn many medical laboratory leaders risk further financial hardships by establishing “problematic” business relationships or developing pricing plans that put their labs at “unreasonable risk” with commercial payers and government regulators.
Financial Pressures Lead Clinical Laboratories to Risky Deals and Policies
One such expert is, attorney Jeffrey J. Sherrin, President and Partner at O’Connell and Aronowitz in Albany, New York. He contends that financial pressures are the impetus for many laboratories’ questionable deal-making and pricing policies.
“We’re increasingly dealing with proposed structures that clinical labs are entering into or considering entering into to remain viable, but without properly assessing how those relationships may run afoul of federal or state law or provider agreements,” Sherrin noted in an interview with Dark Daily. “If that doesn’t keep the labs up at night, it keeps us up at night!”
Tougher Auditing and Billing Scrutiny
While the “overwhelming majority of lab directors, owners, and managers are honest and law abiding,” Sherrin maintains they are “stepping into a minefield” by failing to properly vet decisions regarding:
1. Lab billing and referral arrangements that could violate federal and state anti-kickback or fee-splitting laws, or trigger violations of provider agreements with health insurers.
2. Participation in healthcare Management Service Organizations (MSOs) that involve “billing schemes” rather than legitimate administrative services, marketing, or data-collection activities.
3. Pricing plans and billing policies that could trigger increased scrutiny by government and commercial payers over balance-billing of patients, and waiver or partial waiver of co-pays and deductibles.
In an era of shrinking reimbursements and limited access to healthcare networks, Sherrin urges medical laboratory leaders to be aware of another new reality: tougher audits from commercial payers whose investigators “perceive that there is rampant fraud in the industry” that extends beyond toxicology/pharmacogenomics or molecular/genetic testing laboratories.
“In payers’ minds, it’s across the board,” Sherrin says. “When they see patterns of limiting or capping or waiving of patient responsibility, their normal inclination is to assume this is part and parcel of some fraudulent scheme or practice, as opposed to a proper business decision.”
Proactive Steps to Improve Medical Lab Leader Decision-Making
Seeking guidance from a healthcare attorney before establishing new business relationships, and pricing or billing policies, is one way to increase your laboratory’s odds of surviving payer action.
“Most labs adopt a pricing policy without fully vetting whether they are doing it the right way, the best way, or the way that creates as little risk as possible,” Sherrin notes. “A high percentage of labs have not approached this issue with a degree of scrutiny as to whether the marketing of their test menu, their prices, and how they bill puts them in a better or worse position. Most are making business decisions based on what they need to do competitively without having the ramifications and implications analyzed.”
To help medical laboratory and pathology group leaders prepare for the perils they face, Dark Daily’s upcoming webinar, “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” will reveal how lab leaders can take proactive steps to navigate the tough lab regulations and legal issues that lay ahead.
To attend this critical educational opportunity, click here to register (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
Healthcare attorney Jeffrey W. Sherrin, President and Partner, O’Connell and Aronowitz, will be one of three featured speakers during a new Dark Daily webinar on the upcoming Medicare Part B price cuts, and the critical legal and compliance issues facing clinical laboratories and pathology groups in 2018. (Photo copyright: O’Connell and Aronowitz.)
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST. Sherrin will be joined by David W. Gee, JD, Partner at Davis Wright Tremaine LLP in Seattle, Wash., and Richard Cooper, JD, Chair of the National Healthcare Practice Group, McDonald Hopkins LLC, in Cleveland.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all clinical laboratories today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
Nov 1, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement
Medical laboratory leaders and pathologists must be fully aware of the coming legal and regulatory changes taking place starting January 1, 2018, or risk fines and decreased reimbursements
January 1, 2018, marks the start of new Medicare Part B price cuts for clinical laboratory and anatomic pathology testing. But decreasing reimbursement rates is just one issue facing medical laboratory leaders. The other is the increasingly rigorous regulatory environment poised to ensnare labs and pathology groups unprepared to navigate the dark waters of government compliance.
Tougher payer audits, higher recovery demands, and enforcement policies that increase the personal liability of CLIA lab directors and lab executives, are reasons why attorney David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, argues that laboratories need to step up their focus on compliance and due diligence. He notes laboratories must guard against “death by 1,000 knives” in this new landscape.
Insufficient Focus on Compliance Brings Consequences to Clinical Laboratories and Their Management
“There are more and more people and agencies whose focus it is to regulate and watch the dollars and make sure there is integrity in the system,” noted Gee in an interview with Dark Daily. “That includes not only the formerly regular players—the OIG [Office of Inspector General, US Department of Health and Human Services] and DOJ [Department of Justice]—but you’ve got an increasing number of states with their own False Claims Acts. You’ve got state agencies looking at opportunities to clean up the system and to tag along with other investigations going on, as well as commercial payers who have become more active in pursuing litigation and other measures against practices they allege to be fraudulent.”
Faced with these emerging trends, Gee stresses that labs must:
1. Recognize the increased personal liability facing lab directors, owners, and management, and take steps to mitigate risk of enforcement actions that not only expose executives to potential penalties but also jeopardize the financial health of lab organizations.
2. Understand the importance of meaningful and sustained investment in compliance (including providing compliance officers with the resources to manage an increasingly complex job) and leverage OIG guidance to assess gaps and risks in compliance programs.
3. Be aware of risks inherent in third-party marketing agreements, which can result in short-term spikes in order volume, but which also could reduce “lines of sight” to clients, making it even more difficult to adhere to compliance standards.
Gee believes the emphasis labs place on cost control and “running lean” often results in a lack of attention being paid to compliance. He argues today’s competitive environment increases the need for laboratory directors to ensure proper business practices are followed and “compliance fundamentals are not overlooked in the haste to compete for the business of referral sources.”
Healthcare attorney and Partner, David W. Gee, JD, of Davis Wright Tremaine, LLP, in Seattle will be one of three featured speakers during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: Davis Wright Tremaine, LLP.)
CLIA-Lab Directors to Be Held Personally Liable for Compliance Failures
Because federal regulators are considering holding CLIA-lab directors personally liable for compliance failures, Gee suggests laboratory executives should be motivated to put effective compliance programs in place.
“The best reason I can give for insisting as a lab director that the company actually has a successful and effective compliance program is that these days they stand to lose,” he argues. “The ability to prove you are not complicit—and that you are not the driver of things that have gone wrong—comes down to having an effective and well-documented compliance program so you are on record. And so there’s evidence that, as an engaged lab leader, you tried to do the right thing.”
Educational Opportunities for Lab Leaders
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST. Gee will be joined by Jeffrey J. Sherrin, President and Partner, O’Connell and Aronowitz in Albany, New York, and Richard Cooper, Chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
