Washington Post investigation outlines scientists’ frustrations in the early days of the pandemic, as they worked to deploy laboratory-developed tests for the novel coronavirus
In the wake of the failed rollout of the Centers for Disease Control and Prevention’s (CDC) COVID-19 diagnostic test last February, many CLIA-certified academic and public health laboratories were ready, and had the necessary resources, to develop their own coronavirus molecular diagnostic tests to help meet the nationwide demand for clinical laboratory testing. However, the response from the US Food and Drug Administration (FDA) was, in essence, “not so fast.”
In this second part of Dark Daily’s two-part e-briefing, we continue our coverage of the Washington Post (WP) investigation that detailed the regulatory hurdles which blocked private laboratories from deploying their own laboratory-developed tests (LDTs) for COVID-19. The report is based on previously unreported email messages and other documents reviewed by the WP, as well as the newspaper’s exclusive interviews with scientists and officials involved.
The CDC’s COVID-19 test kits began arriving at public health laboratories on February 8, just 18 days after the first case of the novel coronavirus was confirmed in the US. As the WP noted in an earlier analysis, titled, “What Went Wrong with Coronavirus Testing in the US,” the CDC’s decision to develop its own test was not surprising. “The CDC will develop [its] own test that is suited to an American healthcare context and the regulations that exist here,” explained Jeremy Konyndyk, Senior Policy Fellow at the Center for Global Development. “That’s how we normally would do things.”
But state and local public health laboratories quickly discovered that the CDC test kits were flawed due to problems with one of the reagents. While numerous academic, research, and commercial labs had the capability to produce their own COVID-19 PCR tests, FDA rules initially prevented them from doing so without a federal Emergency Use Authorization (EUA).
The bureaucratic hurdles arose due to Health and Human Services Secretary Alex Azar’s January 31 declaration that COVID-19 was a “health emergency” in the US. By doing so, HHS triggered a mandate that requires CLIA-certified labs at universities, research centers, and hospitals to seek an EUA from the FDA before deploying any laboratory-developed tests.
Scientists, Clinical Laboratories Frustrated by Bureaucratic Delays and Red Tape
To make matters worse, the EUA process was neither simple nor fast, which exasperated lab scientists and clinical laboratory administrators. “In their private communications, scientists at academic, hospital, and public health labs—one layer removed from federal agency operations—expressed dismay at the failure to move more quickly, and frustration at bureaucratic demands that delayed their attempts to develop alternatives to the CDC test,” wrote the WP investigators.
In a Feb. 27 email to other microbiologists, Marc Couturier, PhD, Medical Director at ARUP Laboratories, a national reference laboratory network located in Utah, voiced his irritation with the red tape that stymied private laboratory development of COVID-19 tests. He wrote, “We have the skills and resources as a community, but we are collectively paralyzed by a bloated bureaucratic/administrative process,” reported the WP.
‘FDA Should Not Treat Labs Like They Are Creating Commercial Products’
According to Kaiser Health News (KHN), Greninger was able to identify one of the nation’s first cases of community-acquired COVID-19 by taking “advantage of a regulatory loophole that allowed the lab to test samples obtained for research purposes from UW’s hospitals.”
But navigating the EUA process was a different story, Greninger told the WP. He spent more than 100 hours filling out forms and collecting information needed for the EUA application. After emailing the application to the FDA, Greninger received a reply containing eCopy Guidance telling him he needed to resubmit the information to the Document Control Center (DCC) at the Center for Devices and Radiological Health (CDRH), a federal agency Greninger knew nothing about. Another FDA rule required that the submission be copied to a hard disk and mailed to the DCC.
In an interview with ProPublica, Greninger stated that after he submitted his COVID-19 test—which copies the CDC protocol—an FDA reviewer told him he would need to prove the test would not show a positive result for someone infected with either a SARS or MERS coronavirus. The first SARS coronavirus disappeared in mid-2003 and the only two cases of MERS in the US were diagnosed in 2014. Greninger told ProPublica it took him two days to locate a clinical laboratory that could provide the materials he needed.
Greninger maintains the FDA should not treat all clinical laboratories as though they are making a commercial product. “I think it makes sense to have this regulation when you’re going to sell 100,000 widgets across the US. That’s not who we are,” he told ProPublica.
FDA Changes Course
Under pressure from clinical laboratory scientists and medical doctors, by the end of February the FDA had issued new policy that enabled CLIA-certified laboratories to immediately use their validated COVID-19 diagnostics while awaiting an EUA. “This policy change was an unprecedented action to expand access to testing,” said the FDA in a statement.
Since then, the FDA has continued to respond—albeit slowly—to scientists’ complaints about regulations that hampered the nation’s COVID-19 testing capacity.
Clinical laboratory leaders and pathologists involved in testing for the SARS-CoV-2 coronavirus should monitor the FDA’s actions and be aware of when and if certain temporary changes the agency implemented during the early days of the COVID-19 pandemic become permanent.
To read part one of our two-part coverage of the Washington Post’s investigation, click here.
Thus, clinical laboratory leaders must constantly be on
guard against being drawn into potentially fraudulent activities. For example,
schemes involving substance-use
disorder (SUD), which are the latest healthcare-related scams to draw the
attention of the DOJ.
Lack of Oversight in Substance-Use Disorder (SUD) Leads
to Fraud
According to four experts who co-authored a blog post in Health
Affairs, America’s opioid epidemic has affected more than 20 million
lives and become a “hot spot” for healthcare fraud.
“Substance-use disorder (SUD) treatment was a $9 billion per year industry in 1986 and is now a $35 billion industry that is expected to reach $42 billion in 2020,” they wrote. Thus, it has given rise to escalating opioid-related scams by unethical clinical laboratories, healthcare providers, and recovery-house operators.
“While current regulations around SUD treatment aim to
protect patient safety instead of criminalize addiction treatment, they vary by
state—and in some states, patient protections are limited,” they explained.
“This lack of oversight invites deceptive business practices, insurance fraud,
patient neglect, and ultimately, treatment malpractice that can damage lives
and tear families apart.”
In December 2019, the US Department of Health and Human
Services (HHS) Office of the Inspector General (OIG) released its Semiannual
Report to Congress. The report details the $5.9 billion HHS recovered from
healthcare fraud investigations during fiscal year 2019, more than double the
amount of the prior year.
The Health Affairs authors focused on the major
players in addiction treatment-related fraud that were highlighted in a 2018 Government Accountability
Office (GAO) report. They are:
SUD treatment providers who take advantage of
“gaps in regulations and quality assurance to offer substandard and fraudulent
care that endangers patients and wastes money.”
Unlicensed patient brokers who SUD providers pay
to transport addicts to them, often from hundreds of miles away.
Disreputable recovery house or “sober home”
operators who are subsidized financially by fraudulent SUD providers.
One example the GAO report outlined involved SUD providers in Florida who funded their illegal operations by billing patients’ insurance hundreds of thousands of dollars in unnecessary drug testing over the course of several months.
“At the very moment that ethical healthcare providers are
working harder than ever to address the opioid crisis, unethical actors—such as
providers engaged in fraud—pose a growing problem,” the Health Affairs authors
stated.
Opioid Crisis Turns Urine Screening into ‘Liquid Gold’
Kaiser
Health News (KHN) reported that many doctors who prescribe
opioids began making drug screenings routine in their practices after being
persuaded that doing so would keep them in good standing with licensing boards
and law enforcement, while also reducing their liability and preventing patient
abuse of prescription pills.
In some instances, doctors opened their own clinical laboratories,
KHN stated.
KHN described the nation’s painkiller addiction as turning urine screening into “liquid gold,” particularly for doctors who operate their own clinical laboratories. In 2014 and 2015, Medicare paid $1 million or more for drug-related tests billed by healthcare workers at more than 50 pain management practices in the US, KHN reported.
“It was almost a license to steal. You had such a lucrative possibility, it was tempting to sell as many [tests] as you can,” Charles Root, PhD, Senior Consultant at consulting firm CodeMap, told KHN. CodeMap provides publications, tools, and services that help healthcare professionals navigate the federal Medicare program and has tracked the increase in medical testing laboratories in doctors’ offices, KHN noted.
Federal officials have taken notice of physicians whose
priority is testing patients, not treating them. Jason Mehta, JD, who at
that time was Assistant US Attorney in Jacksonville, Fla., told KHN, “We’re
focused on the fact that many physicians are making more money on testing than
treating patients. It is troubling to see providers test everyone for every
class of drugs every time they come in.”
Clinical laboratories have an important role to play in
identifying fraud and solving the opioid epidemic. Not only are lab leaders ideally
positioned to help providers better understand drug test ordering and
interpretation, but also to help develop value-based interventions within the
continuum of care for this national health crisis.
Some companies save so much in healthcare cost they pay their employees to participate in medical tourism programs
Medical tourism is not new, but it’s changing, and clinical laboratories have a role to play in the models employers use to save money on their employees’ health coverage costs.
Employers that manage the entire process—from securing
passports for their employees, to ensuring they have access to high-quality care
outside the country’s borders—report saving money as well as simplifying the
process for their employees. An apparent win-win.
However, questions linger about:
Availability of diagnostic testing and clinical
laboratories;
If patients treated outside the US receive
adequate protections; and
Whether the quality of care is equal to that in
the US.
One recent example of a company helping employers and employees receive high quality care outside of the US is NASH—the North American Specialty Hospital. NASH was featured in a Kaiser Health News (KHN) article that described one patient’s experience traveling to Cancún for a surgical procedure.
Location, Pre-Existing Conditions, Length of Stay, Etc.,
Affect Final Bill in US
One of NASH’s corporate clients is Ashley Furniture Industries. Headquartered
in Arcadia, Wis., the American home furnishings manufacturer and retailer employs
approximately 17,000 people, including Terry Ferguson. Terry’s wife, Donna, is
the patient highlighted in the KHN story.
One of the healthcare providers NASH partners with is Galenia Hospital, a 55-bed general services hospital in Cancún, Mexico. NASH leases the entire third floor of the hospital. Galenia is next door to a Four Points Sheraton Hotel, making lodging a simple matter for medical tourists.
Currently, NASH focuses on orthopedic surgeries such as total
knee replacements, the medical procedure Donna Ferguson underwent.
A 2015 BlueCross
BlueShield study showed that costs for total-knee-replacement surgery in
the US averaged about $31,000. However, depending on where the surgery takes
place, it can cost as low as $11,317 (Alabama) and as high as $69,654 (New York
City). Pre-existing conditions, length of time in the operating room, number of
days in the hospital, and numerous other factors contribute to the final bill.
NASH, however, sets the final price is up front.
Some Companies Pay Their Employees to Use Medical Tourism
With the average cost for the surgery coming in at around
$12,000, the cost savings to employers is so great some companies actually pay employees
who are willing to travel for procedures, KHN reported. Donna Ferguson paid
no co-pays for her surgery, paid nothing out of pocket for travel or lodging
while in Cancún, and the Ferguson’s received a $5,000 check from Ashley
Furniture.
Ferguson told KHN, “It’s been a great experience.
Even if I had to pay, I would come back here because it’s just a different
level of care—they treat you like family.”
That’s important for hospitals, clinical laboratories, and
all healthcare providers in America to consider. In the minds of patients,
quality of care starts with their experience at the hands of the provider.
Clinical Laboratory Tests in US, Surgery in Mexico
Prior to traveling outside the US for surgery, Ferguson
underwent a physical exam, X-rays, and other diagnostic testing to ensure the
treatment approach was the best for her. Once that was confirmed, IndusHealth, Ashely’s medical travel
plan administrator, “coordinated [Donna’s] medical care and made travel
arrangements, including obtaining passports, airline tickets, hotel and meals,”
for both Donna and Terry Ferguson, KHN reported.
It seems reasonable to assume that NASH has agreements with
multiple clinical pathology laboratories and healthcare facilities throughout
the US for patients to get the tests they need prior to surgery. Partnerships
with medical tourism companies may well represent an avenue for pathology
laboratories to pursue.
Protections for Patients
So, why hasn’t medical tourism become the healthcare juggernaut some experts predicted? Managed Care suggests one reason is that Americans tend to be skeptical of the quality of care they will receive in a foreign facility.
“Building a familiar culture in a foreign destination may be appealing to some American consumers, but I do not see it as a sustainable business,” Health consultant Irving Stackpole, PhD, MEd, Psychology, told KHN. “It’s not unusual for people thinking about this to have doctors, family, and friends who will see this as a high-risk undertaking.”
Several factors helped Ferguson feel better about her
decision to travel to Mexico for surgery. One is that Galenia is credentialed.
Managed Care notes, “A number of organizations credential international facilities. The American Medical Association guidelines for medical tourism recommend that foreign medical providers have accreditation from the Joint Commission International or a similar organization.”
In addition to a credentialed facility and a highly trained
surgeon, NASH also provides US malpractice insurance coverage, giving patients
recourse in the event something goes wrong. Ferguson and American patients like
her would be able to sue in the US if care under this arrangement was not
successful.
Medical Tourism Pays Surgeon’s Full Fee
One fascinating twist in this story is that an American physician was flown to Cancun to perform this operation and was paid his full fee. The surgeon scheduled to perform Ferguson’s operation, Thomas Parisi, MD, JD, trained at the Mayo Clinic. He traveled from Wisconsin to Cancún to perform the procedure. “Dr. Parisi trained at Mayo, and you can’t do any better than that,” Ferguson told KHN.
KHN reported that Parisi spent less than 24 hours in
Cancun and was paid $2,700 for this surgery. That fee is three times of the
amount Medicare pays for this procedure. Further, Parisi’s fee was
significantly above what many managed care plans would negotiate for this type
of surgery.
American-trained physicians are common at many of the
facilities credentialed by the Joint Commission International. “Many overseas
hospitals are staffed in part by physicians and other health professionals who
were trained in US hospitals. One hospital in India has 200 US-trained
board-certified surgeons,” wrote James E. Dalen, MD,
MPH, ScD, and Joseph S. Alpert,
MD, in “Medical Tourists: Incoming and Outgoing,” published in The American
Journal of Medicine (AMJMED).
“In the past, medical tourism has been mostly a blind leap to a country far away, to unknown hospitals and unknown doctors with unknown supplies, to a place without US medical malpractice insurance. We are making the experience completely different and removing as much uncertainty as we can,” James Polsfut, CEO and Chairman, North American Specialty Hospital (NASH), told KHN.
Clinical laboratories in America may find opportunities
providing testing services to medical tourism organizations like NASH. It’s
worth investigating.
Another push for price transparency steps up pressure on medical laboratories and anatomic pathology groups to develop compliance strategies
Clinical
laboratories and anatomic
pathology groups are under increasing pressure to develop strategies for
making their test prices more accessible to patients. Those pressures are
likely to grow due to newly proposed federal regulations that aim to allow
patients to compare prices for healthcare services on their smartphones.
This new proposed rule comes less than a year after a rule
involving hospital prices was implemented. As of January 1, 2019, the federal
Centers for Medicare and Medicaid Services (CMS) required
US hospitals to post their prices online. Dark
Daily reported last year about the risks and opportunities posed by
that move.
Giving Patients Access to Their Health Information
In May, officials with those agencies discussed the
regulations in prepared remarks for a hearing of the HELP committee.
“A central purpose of the proposed [ONC] rule is to
facilitate patient access to their EHI on their smartphone, growing a nascent
patient- and provider-facing app economy,” he said, noting that this access is
impeded by a lack of interoperability between health information systems, as
well as restrictions on information exchange imposed by health IT developers.
The proposed rule will mandate use of common software
standards so that app developers can access health information systems from
different vendors. As a result, patients could choose their own apps to view
their data regardless of which electronic
health records (EHR) system their provider uses. The rule also includes
provisions for dealing with so-called “information blocking”
by vendors, Rucker noted.
If the proposed rule is implemented as currently written,
there would be a need for clinical laboratories and pathology groups to ensure
that their laboratory
information systems (LIS) meet the specifications of the new rule. This may
mean that, along with enabling two-way digital interfaces with physicians’
EHRs, labs also would need to be able to pass data to the apps and mobile
devices used by patients that are covered by the proposed new rule.
“ONC’s proposed rule primarily focuses on clinical data,” he
said. “However, advances in computer science and the maturity of data standards
are accelerating the convergence of medical data with billing and price data.
As such, the rule proposes to include such information as part of a patient’s
EHI that should be available for access, exchange, and use.”
Enabling cost comparisons will allow patients to make
more-informed decisions about their healthcare, Rucker added. But he
acknowledged that implementing this vision won’t be easy.
“Unfortunately, the complex and decentralized nature of how
payment information for healthcare services is currently created, structured,
and stored presents many challenges to achieving price transparency,” he said.
“This entire information chain is geared to retrospective payments rather than
prices.”
Rucker told the HELP committee that the [ONC] will be
seeking public input about how to capture price information and enable price
transparency. Once the rule is finalized and published, providers will have two
years to comply.
Medical Laboratories Need a Strategy for Providing Access
to Patient Records
The proposed CMS rule imposes requirements on payers to
provide electronic access to health claims and other information for their
enrollees.
In her prepared remarks
for the Senate HELP hearing, Kate Goodrich,
MD, Director of the Center for Clinical Standards and Quality (CCSQ) and
CMS Chief Medical Officer, said, “A core policy principle underlying our
proposals is that every American should be able, without special effort or
advanced technical skills, to see, obtain, and use all electronically available
information that is relevant to their health, care, and choices—of plans,
providers, and specific treatment options.”
That’s all well and good, however, as Fred Schulte, a senior
correspondent for Kaiser
Health News, wrote in his coverage of the two proposed rules, “Meeting
these goals could prove to be a tall order.”
He continued, “For well over a decade, federal officials
have struggled to set up a digital records network capable of widespread
sharing of medical data and patient records.” Not to mention the billions of
dollars already spent by the CMS and ONC incentivizing providers to implement
truly interoperable health
information exchange (HIE) systems nationwide.
Nevertheless, pressure for greater consumer data access and
price transparency will likely continue to build across the healthcare
industry, including on medical laboratories. Price transparency as a trend is
making steady forward progress, despite resistance by hospitals, physicians,
medical associations, and others.
All clinical laboratories should have a strategy to make lab
test prices readily available to patients. It is something that will become
common at some future point.
Kaiser
Health News (KHN) recently
reported on investigations by the OIG into hospitals allegedly offering
unusually high salaries and other perks to specialists because they attract highly
profitable business.
Wheeling, KHN reported, paid one anesthesiologist $1.2
million per year, which, Rau notes, is higher than the salaries of 90% of the
pain management specialists around the country. Rau went on to describe how
Wheeling also paid one obstetrician-gynecologist $1.3 million per year, and a
cardiothoracic surgeon $770,000 per year along with 12 weeks of vacation time.
In each of those cases, the whistleblower who prompted the qui tam investigation reported
that the specialists’ various departments were frequently in the red, reported KHN.
“The problem, according to the government, is that the
efforts run counter to federal self-referral bans and anti-kickback laws that
are designed to prevent financial considerations from warping physicians’
clinical decisions,” wrote Rau.
Wheeling not only contests the lawsuits brought against it,
but also has filed a countersuit against the whistleblower. KHN said the
hospital claims “its generous salaries were not kickbacks but the only way it
could provide specialized care to local residents who otherwise would have to
travel to other cities for services such as labor and delivery that are best
provided near home.”
OIG’s Fraud and Abuse Laws: A Roadmap for Physicians
The KHN article mentions
five laws the OIG lists on
its website that are particularly important for physicians to be aware of. They
include the:
False Claims Act: states that it’s illegal to file false Medicare or Medicaid claims.
Anti-Kickback Statute: states that paying for referrals is illegal, that physicians can’t provide free or discounted services to uninsured people, and that money and gifts from drug and device makers to physicians are prohibited.
Stark Law(physician self-referral): says that referrals to entities with whom the physician has a familial or financial relationship are off-limits.
Exclusion Statue: describes who cannot participate in federal programs, such as Medicare.
Civil Monetary Penalties Law: authorizes the Secretary of Health and Human Services, which operates the OIG, to impose penalties in cases of fraud and abuse that involve Medicare or Medicaid.
“Together, these rules are intended to remove financial
incentives that can lead doctors to order up extraneous tests and treatments
that increase costs to Medicare and other insurers and expose patients to
unnecessary risks,” KHN said.
Other Hospitals Under Investigation
Wheeling Hospital is not the only healthcare institution
facing investigation. The Dallas
Morning News (DMN) reported on a case involving Forest
Park Medical Center (FPMC) in Dallas that resulted in the conviction of
seven defendants, including four doctors. Prosecutors outlined the scheme in
court, saying that FPMC illegally paid for surgeries.
“Prosecutors said the surgeons agreed to refer patients to
the Dallas hospital in exchange for money to market their practices,” DMN
reported, adding “Patients were a valuable commodity sold to the highest
bidder, according to the government.”
One of the convicted physicians, Michael Rimlawi, MD,
told DMN, “I’m in disbelief. I thought we had a good system, a fair
system.” His statement may indicate the level to which some healthcare
providers at FPMC did not clearly understand how anti-kickback laws work.
“The verdict in the Forest Park case is a reminder to
healthcare practitioners across the district that patients—not payments—should
guide decisions about how and where doctors administer treatment,” US Attorney Erin Nealy Cox told DMN.
Know What Is and Is Not a Kickback
Both the Wheeling Hospital investigation and the Forest Park
Medical Center case make it clear that kickbacks don’t always look like
kickbacks. Becker’s Hospital Review
published an article titled “Four
Biggest Anti-Kickback Settlements Involving Hospitals in 2018” that details
cases in which hospitals chose to settle.
These four incidents involved hospitals in Tennessee,
Montana, Pennsylvania, and New York. This demonstrates that kickback schemes
take place nationwide. And they show that violations of the Stark Law, the
False Claims Act, and the Anti-Kickback Statute can happen in numerous ways.
Whether in a clinical laboratory or an enterprisewide health
network, violating laws written to prevent money—rather than appropriate
patient care—from being the primary motivator in hiring decisions, may result
in investigation, charges, fines, and even conviction.
“If we’re going to solve the healthcare pricing problem,
these kinds of practices are going to have to go away,” Vikas Saini, MD, President
of the Lown Institute, a Massachusetts
nonprofit that advocates for affordable care, told KHN.
Though these recent OIG investigations target hospitals,
clinical laboratory leaders know from past experience that they also must be
vigilant and ensure their hiring practices do not run afoul of anti-kickback
legislation.