Labs Reassess Processing and Handling Payments in Light of OIG Special Fraud Alert
Clinical and anatomic pathology laboratories that pay referral sources for processing and handling (P&H) of specimens are reassessing their business models in light of a recent special fraud alert issued by the Health and Human Services Office of Inspector General (OIG). For example, Richmond, Va.-based Health Diagnostic Laboratory Inc. (HDL) has stopped offering reimbursements to […]
Clinical and anatomic pathology laboratories that pay referral sources for processing and handling (P&H) of specimens are reassessing their business models in light of a recent special fraud alert issued by the Health and Human Services Office of Inspector General (OIG). For example, Richmond, Va.-based Health Diagnostic Laboratory Inc. (HDL) has stopped offering reimbursements to health care providers for sending blood samples to its laboratory. HDL says that while it believes payment of P&H fees to help cover the cost of specimen handling is a widespread industry practice, it has stopped making those payments to referring providers as of June 25, 2014. “Health Diagnostic Laboratory Inc. has been cooperating fully with the Department of Justice as it conducts what we understand to be an industrywide review of certain clinical laboratory practices, many of which have been long-standing within the industry,” the company said in a statement provided to National Intelligence Report. According to a report in the Richmond Times-Dispatch, the company notified health care providers June 30 that it would no longer provide P&H payments to referral sources. The company’s decision to halt those reimbursements came in response to an alert issued June 25 by the OIG. That fraud alert warned clinical laboratories and physicians that providing remuneration to physicians to collect, process, and package patients’ specimens or establishing databases to collect patient testing data could violate federal anti-kickback law (NIR, July 10, 2014, p. 1). While processing fees are permissible in some cases, they violate the anti-kickback statute if they are used to induce referrals or if they are above fair market value. Medicare will pay $3 for specimen collection, but some boutique and esoteric labs reportedly have been paying referral sources upward of $20 or $30 for processing and handling. Several labs that NIR spoke with said they do not pay P&H fees to referral sources. In the fraud alert, the OIG expressed concern about the risks that specimen processing arrangements and registry arrangements pose under the anti-kickback statute. The OIG lists a number of characteristics of a specimen processing arrangement that it says may be evidence of an unlawful purpose, including:
- Payment exceeds fair market value for service actually rendered by the party receiving the payment;
- Payment is for services for which payment is also made by a third party, such as Medicare; and
- Payment is made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of such referrals.
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