Medical fraudsters are targeting Medicare recipients with schemes to persuade them to agree to genetic tests advertised as informing them if they are predisposed to specific chronic diseases or cancer
Medicare scams involving orders for unnecessary, expensive testing are not new. However, clinical laboratory managers and anatomic pathologists need to be aware—particularly those working in hospital and health system labs—that an entirely new wave of fraud involving medical laboratory testing is gaining momentum. This time, instead of specialty cardiology, toxicology, and pain management testing, the scam involves genetic tests.
The shifting focus to genetic tests by fraudsters is a
recent development to which many hospital-based medical laboratory
professionals may be unaware. One reason that the hospital lab managers can be
extraordinarily compliant with federal and state laws is because they don’t
want to threaten the license of their hospital. So, hospital lab staff often
are unaware of the types and extent of fraud involving certain lines of clinical
lab testing that surface in the outpatient/outreach market.
The growing number of fraudulent activities associated with genetic tests is now an issue for federal healthcare fraud investigators. Former US attorney Robert M. Thomas, Jr., a whistleblower attorney, adjunct professor at Boston University School of Law, and a civil rights advocate, wrote in STAT, “What’s going on here is the same pattern of activity that has occurred throughout the healthcare system: a great majority of law-abiding actors and a few that seek out opportunities to game the system of government reimbursement. If you can get a saliva swab and a Medicare number [to provide a specimen for a genetic test] from an unsuspecting senior and falsify a doctor’s order (or find a shady doctor to write one), there’s an easy four-figure sum to be had.”
This aligns with a recent fraud alert from the US Department of Health and Human Services Office of Inspector General (OIG) that states: “Scammers are offering Medicare beneficiaries ‘free’ screenings or cheek swabs for genetic testing to obtain their Medicare information for identity theft or fraudulent billing purposes. Fraudsters are targeting beneficiaries through telemarketing calls, booths at public events, health fairs, and door-to-door visits.
“Beneficiaries who agree to genetic testing or verify
personal or Medicare information may receive a cheek swab, an in-person
screening or a testing kit in the mail, even if it is not ordered by a
physician or medically necessary.
“If Medicare denies the claim, the [Medicare] beneficiary
could be responsible for the entire cost of the test, which could be thousands
of dollars.”
In a STAT column, former US attorney Robert M. Thomas, Jr. (above), noted that “All a scammer must do is find a medical laboratory willing to split the profit from the testing once the DNA samples are in hand. With more and more labs opening, there are plenty of doors upon which to knock.” This makes it imperative that clinical laboratory managers train their staff to identify and question potentially fraudulent test orders. (Photo copyright: Twitter.)
How the Scam Works
As with similar fraud cases, the scamsters pay inducements
to often-unaware patients, physicians, and others to encourage an order for a
genetic test. They then bill federal health programs and private insurers at
inflated prices.
Thomas describes one such scenario used to increase genetic
test orders. “A typical scheme might go something like this: A scammer offers
free ice cream sundaes, gift cards, or even casino chips at a retirement
community or ‘Medicare expo’ for anyone who would like to hear about the
exciting new technology of genetic testing and what it might reveal about ‘your
family’s risk of cancer’ or some other come-on,” explained Thomas. “The scammer
describes this sophisticated technology and downplays or ignores the medical
necessity criteria and the need for a doctor’s order. He or she persuades some
attendees to provide saliva samples and gets identifying information, such as
the senior’s name, date of birth, and Medicare number.
“The scammer then approaches a testing lab, saying, ‘I can find you a lot more business and get you a lot more patients if you share the proceeds with me.’ This, of course, violates the federal anti-bribery law known as the Anti-Kickback Act. But the lure of high-volume profits can be strong enough for some to ignore that roadblock,” he noted.
What Medical Laboratories Need to Know about Fraud and
Genetic Tests
Regardless of how the fraudster proceeds—whether asking the
lab company outright to split profits or by simply sending a high volume of the
same genetic test to the lab without explanation—clinical laboratory managers
should be alert to such activities.
Thomas writes: “An ethical lab would detect that something
is amiss with such a request [involving a genetic test]. An alert lab might
question how an individual, who is not a doctor, has gotten so many saliva
samples and [so much] personal information from so many ‘patients.’ Other [genetic
testing] lab companies may simply play the game without asking enough
questions, or worse, knowing that the tests are not medically necessary, as
required by the rules. The promise of easy money can be just too alluring.”
Physicians and medical laboratories that participate in
these scams are in violation of the federal anti-bribery laws. In “Federal
Investigations into Alleged Kickback Schemes between Hospitals and Physicians
Increase in Number and Scope,” Dark Daily reported on new OIG
investigations into hospitals alleged to have violated anti-kickback
legislation.
Current Cases Involving Genetic Testing Scams
Fraudulent medical test ordering schemes are an ongoing problem that Dark Daily has repeatedly covered. Though the genetic testing aspect is relatively new, there are several recent and current cases that outline the consequences of participating in the new scam.
For example, in February GenomeDx Biosciences Corp. (GenomeDx) agreed to pay $1.99 million to settle a federal case regarding unnecessary genetic testing. In this case, post-operative prostate cancer patients were given a genetic test called Decipher even though they “did not have risk factors necessitating the test,” a Department of Justice (DOJ) press release states. The DOJ claimed GenomeDx fraudulently billed Medicare for the tests, violating the False Claims Act.
A similar federal case involved a doctor who was charged with ordering genetic tests for patients he never saw or treated. Though the doctor was licensed to practice medicine in Florida, the “patients” in question resided in Oklahoma, Arizona, Tennessee, and Mississippi. One patient testified to having responded to a Facebook ad that offered a $100 gift card “for people interested in genetic testing,” a press release from the US Attorney’s Office District of New Jersey stated.
One important recommendation is that medical laboratory
professionals learn how to spot and question potentially fraudulent testing
requests. This shift to genetic testing is just the latest threat. Even clinical
labs that are well prepared could be caught unaware, particularly if the
fraudster sends genetic test orders to multiple labs to process what are
probably medically-unnecessary tests.
As hospitals are forced to innovate, anatomic pathologists and medical laboratories will need to adapt to new healthcare delivery locations and billing systems
As new challenges threaten the survival of many hospitals worldwide, medical laboratories may be compelled to adapt to the needs of those transforming organizations. Those challenges confronting hospitals are spelled out in a recent report from management consulting firm McKinsey and Company with the provocative title, “The Hospital Is Dead, Long Live the Hospital!”
A team of analysts led by McKinsey senior partner Penny
Dash, MB BS, MSc, looked at nine trends affecting hospitals in North America,
Europe, Asia, and other regions. These trends, the authors contend, will force
hospitals to adopt innovations in how they are structured and how they deliver
healthcare.
Here are nine challenges hospitals face that have
implications for medical laboratories:
1. Aging Patient Populations
“Patient populations are getting older, and their needs are becoming more complex,” McKinsey reports, and this is imposing higher cost burdens. The US Census Bureau projects that by 2030 approximately 20% of the US population will be 65 or older compared with about 15% in 2016.
The federal Centers for Medicare and Medicaid Services (CMS) reports that this age group accounts for a disproportionate share of healthcare costs. In 2014, CMS states, per-capita healthcare spending was $19,098 for people 65 or older compared with $7,153 for younger adults.
The Census Bureau graphic above illustrates how the age of the US population is changing. People are living longer, and as Dark Daily reported in May, this could present opportunities for medical laboratories and anatomic pathologists, as early detection of chronic diseases affecting older patients could ultimately reduce treatment costs. (Photo copyright: US Census Bureau.)
2. Patients Are Behaving More Like Consumers
“Patients—along with their families and caregivers—expect to
receive more information about their conditions and care, access to the newest
treatments, and better amenities,” McKinsey reports.
Clinical advances are increasing the range of treatments that can be performed in outpatient settings, McKinsey reports. The authors point to multiple studies suggesting that patients can receive better outcomes when more care is delivered outside the hospital. Dark Daily has often reported on the impact of this trend, which has reduced demand for in-hospital laboratory testing while increasing opportunities for outpatient services.
4. Move Toward High-Volume Specialist Providers
Compared with general hospitals, specialized, high-volume “centers
of excellence” can deliver better and more cost-effective care in many
specialties, McKinsey suggests. As evidence, the report points to research
published over the past 12 years in specialist journals.
Some US employers are steering patients to top-ranked providers as part of their efforts to reduce healthcare costs. For example, Walmart (NYSE:WMT) pays travel costs for patients to undergo evaluation and treatment at out-of-state hospitals recognized as centers of excellence, which Dark Daily reported on in July.
UnitedHealthcare’s new preferred lab network also appears to be a nod toward this trend. As The Dark Report revealed in April, the insurer has designated seven laboratories to be part of this network. These labs will offer shorter wait times, lower costs, and higher quality of care compared with UnitedHealthcare’s larger network of legacy labs, the insurer says.
5. Impact of Clinical Advances
Better treatments and greater understanding of disease
causes have led to significantly lower mortality rates for many conditions,
McKinsey reports. But the authors add that high costs for new therapies are
forcing payers to contend with questions about whether to fund them.
As Dark Daily has often reported, new genetic therapies often require companion tests to determine whether patients can benefit from the treatments. And these also face scrutiny from payers. For example, in January 2018, Dark Daily reported that some insurers have refused to cover tests associated with larotrectinib (LOXO-101), a new cancer treatment.
6. Impact of Disruptive Digital Technologies
The McKinsey report identifies five ways in which digital
technologies are having an impact on hospitals:
Automation of manual tasks;
More patient interaction with providers;
Real-time management of resources, such as use of hospital beds;
Real-time clinical decision support to enable more consistency and timeliness of care; and
Use of telemedicine applications to enable care for patients in remote locations.
All have potential consequences for medical laboratories, as Dark Daily has reported. For example, telepathology offers opportunities for pathologists to provide remote interpretation of blood tests from a distance.
7. Workforce Challenges
Many countries are contending with shortages of physicians,
nurses, and allied health professionals, McKinsey reports. The authors add that
the situation is likely to get worse in the coming decades because much of the current
healthcare workforce consists of baby boomers.
An investigation published in JAMA in May indicated that, in the US, the number of active pathologists decreased from 15,568 to 12,839 between 2007 and 2017. In January, Dark Daily reported that clinical laboratories are also dealing with a generational shift involving medical technologists and lab managers, as experienced baby boomers who work in clinical laboratories are retiring.
8. Financial Challenges
In the United States and other countries, growth in
healthcare spending will outpace the gross domestic product, the McKinsey
report states, placing pressure on hospitals to operate more efficiently.
9. More Reliance on Quality Metrics
McKinsey cites regulations in Canada, Scandinavia, and the UK that require hospitals to publish quality measurements such as mortality, readmittance, and infection rates. These metrics are sometimes linked to pay-for-performance programs, the report states. In the United States, Medicare regularly uses quality-of-care metrics to determine reimbursement, and as Dark Daily reported in July, a new Humana program for oncology care includes measurements for medical laboratories and anatomic pathology groups.
The McKinsey report reveals that several trends in
healthcare are forcing healthcare leaders to adopt new strategies for success.
The report’s authors state that their “results show that contemporary
healthcare providers around the world are facing several urgent imperatives: to
strengthen clinical quality; increase the delivery of personalized,
patient-centered care; improve the patient experience; and enhance their
efficiency and productivity.”
These pressures on hospitals typically also require
appropriate responses from clinical laboratories and anatomic pathology groups
as well.
PACLAB’s effective use of clinical laboratory sales reps demonstrates how effective collaboration between sales and operations can help an outreach lab increase specimen volume and expand its market share
Despite falling prices for clinical laboratory testing and payers increasingly excluding labs from their provide networks, savvy hospitals and health systems continue to enjoy profitable laboratory outreach programs. One common factor shared by these successful hospital lab outreach businesses is that they support productive lab sales representatives.
To tell the story of how effective lab sales reps contribute to the ongoing success of the hospital lab outreach programs they serve,The Dark Report initiated the clinical lab industry’s first-ever program of national recognition for top-performing lab sales representatives. These awards were launched in May 2016, at the 21st Annual Executive War College on Laboratory and Pathology Management (EWC). At that time, The Dark Report also announced the first winners of the National Lab Sales Excellence Awards contest. (more…)
A 1999 case involving California phlebotomist charged with reusing needles resulted in similar widespread testing of thousands of patients
Because of possible exposure to HIV, hepatitis B, and hepatitis C from a healthcare worker, thousands of patients treated in multiple hospitals in different states are being offered free clinical laboratory testing. This situation is attracting national media attention and is a reminder to pathologists and medical laboratory professionals of the increased transparency that is being given to different types of medical errors that expose patients to risk.
Medical laboratory sales reps selected as winners will each receive a $3,000 prize and an expense-paid trip to the Executive War College for the awards ceremony
Never before has the profession of laboratory medicine had a national achievement award for sales professionals who are a primary source of service between their clinical laboratory organizations and the physicians who order medical laboratory tests.
