Lab Institute Addresses Key Regulatory, Reimbursement Topics for Clinical Laboratories
Attendees at G2 Intelligence’s 31st annual Lab Institute (Oct. 16-18, Arlington, Va.) gleaned insight on issues vital to their survival as they navigate the rough waters of government regulations and ever-increasing scrutiny of federal and state agencies while trying to grow their business in a highly competitive marketplace. Among the issues discussed during a session […]
Attendees at G2 Intelligence’s 31st annual Lab Institute (Oct. 16-18, Arlington, Va.) gleaned insight on issues vital to their survival as they navigate the rough waters of government regulations and ever-increasing scrutiny of federal and state agencies while trying to grow their business in a highly competitive marketplace. Among the issues discussed during a session on regulatory compliance were Clinical Laboratory Improvement Amendments (CLIA) proficiency testing issues, Stark and anti-kickback developments, pricing issues, and increasing qui tam actions. S. Craig Holden, an attorney with Ober|Kaler (Baltimore), advised labs to be mindful of the rules governing referrals of proficiency testing (PT) samples to other labs, which is a violation of CLIA. The issue became critical last year when an accidental referral of a PT sample nearly cost a prominent university laboratory its CLIA license because, according to the Centers for Medicare and Medicaid Services (CMS), it has no choice but to revoke certification if a referral occurs because regulations do not allow any flexibility. In response to the incident, the laboratory community lobbied Congress to change the CLIA regulations to allow CMS some flexibility in sanctions imposed. The result is the Taking Essential Steps for Testing Act of 2012, which permits, but no longer requires, revocation of a CLIA certificate for PT sample referrals in certain cases and allows for intermediate sanction in place of the two-year CLIA licensure prohibition imposed on a lab owner or operator. Holden also addressed what he sees as a likely change to the Stark regulations concerning the in-office ancillary services exception that allows physicians to refer diagnostic tests, including radiology and anatomic pathology tests, to a testing facility in their own office. Lawmakers introduced the Promoting Integrity in Medicare Act of 2013 (H.R. 2914) after a Government Accountability Office report showed that physicians who changed to a self-referral model in which they received a financial benefit significantly increased the number of referrals for those same services as they did before they received any financial benefit. The legislation would amend the in-office ancillary services exception to exclude anatomic pathology services, defined to include the professional and technical components of surgical pathology; cytopathology; certain hematology, blood banking, and pathology consultation; and clinical laboratory interpretation services paid under the Medicare Physician Fee Schedule. If the law passes, laboratories that are providing some or all of the technical components for these tests would have to unwind those relationships but may see an increased volume of referrals for these tests and services. Also under Stark and the anti-kickback statute, CMS has proposed to extend the exception and safe harbor for donated electronic health records (EHRs) until December 2016. This proposal would exclude laboratories, among others, as permitted donors of EHRs. This is considered good news for laboratories because of the expense involved with the donation of EHR software under these exceptions as they currently exist. Holden also announced some changes that may be forthcoming concerning in-office phlebotomists (IOPs). Labs are permitted to place a phlebotomist in the office of a physician who refers tests to the lab as long as the phlebotomist does not perform any services that would normally be provided by office personnel. The phlebomist can perform blood collection and processing only. An unresolved issue with IOPs is whether the lab can legally pay rent for the space occupied by the phlebotomist. Holden believes that clarification on that issue will be provided soon but labs would still have to adhere to any state laws governing IOPs. Pricing Issues Holden reviewed a variety of pricing and discounting issues for laboratories and offered this advice for laboratories: Never tie discounts on laboratory services billed to the physician office, defined as client pricing, to the referral of Medicare or Medicaid tests; ensure that client bill pricing is profitable on a stand-alone basis if no other referrals are received from the client; don’t discount below the cost to provide the services; and be aware of pricing patterns across all clients so that similar clients receive comparable pricing. Certain state laws may prohibit discounting lab testing or may require that the state Medicaid program receive the lowest price offered to any similar client or third-party payer, noted Holden, who advised labs to be aware of the laws in their states. Holden also noted that the expansion of the False Claims Act (FCA) under the Fraud and Enforcement and Recovery Act of 2009 and the Accountable Care Act creates a new FCA exposure for labs. He also pointed out that mandatory compliance programs will precipitate an increase in self-reporting problems and that smaller, less sophisticated laboratories will be disproportionately impacted. Holden’s presentation should help raise awareness of where laboratory compliance officers and administrators should focus their compliance resources in the coming 12 to 24 months. Takeaway: Laws and regulations that affect laboratories are constantly evolving, so it is critical that compliance officers ensure they stay abreast of these changes by attending programs like Lab Institute.