Six Lab Sales and Marketing Compliance Problem Areas and How to Address Them
It’s imperative for labs to establish and maintain an active corporate compliance program that augments the actual scientific testing.
Sales and marketing are crucial operations for lab entities striving for growth and acceptance of offered products. It’s also imperative for labs to establish and maintain an active corporate compliance program that augments the actual scientific testing for patient care. Such a program should encompass all sales and marketing activities that impact compliance with coding, billing, and reimbursement regulatory requirements. Here’s a quick tour of six problem areas to address.
1. Requisition Design
The U.S. Department of Health and Human Services Office of Inspector General (OIG) has stated that each lab should design its requisitions to assure that:
- Each ordering practitioner can make an independent judgment regarding medical necessity for ordered testing
- The billing lab can capture correct information needed for billing purposes
- The form includes a statement that Medicare doesn’t cover routine screening tests
Designing these forms can be difficult when the goal is to document a clear order for patient testing. The requisition should define the components of panels. Transparency is expected and providers must be able to select only the components that are medically necessary; the check boxes should allow this. A requisition should allow “conscious ordering.” Consider the example of a requisition that lists a flow cytometry panel titled “Leukemia/Lymphoma Panel.” That description identifies neither the markers included nor the number of markers tested. This information may be explained on the back of the requisition.
Requisitions should also be appropriately formatted to capture an order for reflex testing.
In the billing information section of the form, we suggest adding check boxes for Hospital Non-patient or Hospital Outpatient orders. This may alert the lab when testing should be billed to the ordering facility rather than to the insurer. Space may appear sufficient for capturing ICD-10 coding but may not always stand out to grab attention. In addition, beware of forms that include preprinted ICD-10 codes that would allow coverage. We encourage eliminating ICD codes from any requisitions as they tend to “steer” the ordering provider to select a code that may or may not apply to the patient’s condition but does allow coverage for reimbursement.
2. Standing Orders
While standing orders aren’t typically sales and marketing activities, sales staff may be involved in promoting them for ease of testing when establishing a new client. Marketing personnel may also be involved in designing the order form.
Medicare cautions providers to be aware of the various meanings of the term “standing orders.” Some understand this to mean recurring orders specific to the care of an individual patient. Others interpret it as routine orders for services delivered to a population of patients. Only medically necessary services ordered and rendered, including those based on treatment protocols, are considered for reimbursement when documentation supports the orders and/or protocols are individualized to each patient.
In addition, the Centers for Medicare & Medicaid Services (CMS) stresses that “cooperation between ordering and referring providers and facilities that perform diagnostic tests is crucial to reducing errors and avoiding claim denials.”1 Standing orders may be easily misinterpreted. They should be used with caution to provide recurring orders for medically justified services specific to the care of an individual patient.
The OIG comments in the Compliance Program Guidance for Clinical Laboratories that standing orders are not prohibited in connection with an extended course of treatment but too often they have led to fraudulent and abusive practices.2 Labs must be vigilant and take appropriate steps to prevent abuse. Compliance plan policies should require the lab to monitor existing standing orders to ensure their continuing validity. These comments can apply to orders in skilled nursing facilities, end-stage renal disease (ESRD) sites, transplant centers, etc. If a policy isn’t currently employed, we suggest adopting one. Key elements include:
- Separate requisition form
- Concise request for services and frequency for testing
- Diagnostic information
- Last no longer than 1 year with quarterly review
3. Annual Notices to Physicians
Labs should send all physician clients a written annual notice listing the following information:
- Medicare national policies and local coverage determinations (LCDs)
- That organ and disease related panels will only be paid and will only be billed when all components are medically necessary
- Medicare laboratory fee schedule
- Indication that Medicaid reimbursement is equal to or less than Medicare reimbursement
- Medicare allowable for each component of a panel
- That customized panels may not be reasonable, covered, or necessary and such tests will not be billed
- That individuals causing false claims are submitted to sanctions or “remedies” under civil, criminal, or administrative law
It’s appropriate to provide an actual copy of the Medicare contractor’s LCDs and Medicare NCDs (national coverage determinations). It’s also permissible to place the annual notice on a corporate website.
Although CMS doesn’t require it, labs should have physicians sign an acknowledgment that they understand the potential implications of ordering customized profiles.
4. General Marketing Functions
The OIG states that marketing materials should reflect “honest, straightforward, fully informative, and non-deceptive” information. “[I]ndividuals authorized to order tests” must be able to “understand the services offered by the laboratory, what services will be provided when tests are ordered, and the financial consequences for Medicare, as well as other payors, when tests are billed.”2
The OIG Guidance reinforces that labs should ensure that their marketing information is clear, correct, nondeceptive, and fully informative. This would pertain to identifying individual components of testing panels (including customized panels) and verifying the accuracy of marketing materials (pamphlets and brochures), newsletters, and website content. Truth in advertising and in interactions via social media is a must.
5. Sales Representative Access to Protected Health Information
It’s not advisable to require or allow sales representatives to engage in activities that involve the collection, use, or disclosure of protected health information (PHI) protected by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Examples of problematic practices:
- Visiting physician clients that fail to forward sufficient ICD-10 codes when ordering procedures subject to coverage policies seeking to obtain the needed diagnostic information
- Personally delivering patient results to a client who requests it
- If the sales person has medical training, education, or experience, discussing test results with the physician client and assisting with interpretation of the results
- Calling customer service on behalf of physician clients to find out if a sample from a specific patient has been received by the lab, disclosing the patient’s name in the process
- Transporting specimens
6. Venipuncture Reimbursement
We’ve all read the nightmare stories about labs paying physician clients to draw blood specimens for testing, e.g., $25 for each venipuncture performed by office staff. Venipunctures may only be billed by the entity that performs the blood draw. It may not be billed or purchased by the lab. The physician payment is considered a kickback. It is also a kickback to receive payment for ordering a certain volume of lab services. These scenarios typically involve input from sales staff.
Another questionable practice is paying an administrative fee for specimen retrieval. Labs have reported paying an administrative fee of $30 for the retrieval, packaging, storing, and sending of tissue for testing. This type of arrangement raises concerns if only technical services are expended.
Takeaway: Provide Compliance Training for Sales and Marketing Personnel
The OIG’s clinical laboratory compliance guidelines indicate that “Targeted training should be provided to corporate officers, managers, and other employees whose actions affect the accuracy of the claims submitted…such as employees involved in the coding, billing, and marketing processes.”2 Sales and marketing personnel should receive additional periodic and documented training regarding adherence to compliance.
The OIG recognizes that marketing personnel are under pressure to meet business goals and may be “vulnerable to engaging in prohibited practices.”2 Additional policies should address email and encryption techniques, patient confidentiality, test ordering, and hotlines and drop boxes for reporting concerns. The intranet provides a common communication mechanism if sales staff are dispersed across the country.
Retraining can be implemented at the annual sales meeting. Topics should include billing, coding, and reimbursement, provision of equipment and supplies, pricing/charging, and applying discounts. These are typical risk areas; others may apply. Regulatory issues, including those discussed by the U.S. Department of Justice or OIG in Advisory Opinions and Compliance Guidance, such as safe harbors, False Claims Act, Stark, Anti-Kickback Statute, Civil Monetary Penalties, etc., should also be included in lab sales and marketing staff training.
Diana W. Voorhees, M.A., CLS, MT, SH, CLCP, CPCO, is principal in DV & Associates, Inc., Salt Lake City, UT, which makes no representation, guarantee, or warranty, expressed or implied, that the information provided is free of error, and will bear no responsibility or liability for results or consequences of its use.
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