Compliance Tips for Laboratories in 2023 - Federal Lawyer
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Compliance Tips for Laboratories in 2023

compliance risks

Clinical laboratories, especially molecular and respiratory labs, faced one of the most unique environments imaginable over the past few years. In early 2020, as the COVID-19 pandemic struck the nation and the world by surprise, the federal government called upon labs to fill what can only be described as unprecedented demand. Many labs were consumed—and overwhelmed—by the sudden burden placed upon them. To allow labs to test as many samples as possible, the federal government eased regulations.

For the most part, respiratory and molecular labs stepped up and met these demands. As one may expect, instances of healthcare fraud increased, and the federal government took note. Although COVID variants will continue to be a threat to most Americans, the landscape is very different than it was in early to mid-2020. At-home tests are available at drugstores across the country at a reasonable cost. COVID-19 vaccines are being created that target the latest variant. In response to these changes, the federal government drastically changed its position related to the regulation of clinical labs. Now, perhaps more than ever, the Federal Bureau of Investigation and the Health and Human Services Office of Inspector General are coming down hard on respiratory and clinical labs for regulatory violations.

Given the current landscape, it is imperative that clinical labs take the necessary precautions to ensure they are in compliance. Below are some critical compliance tips for laboratories in 2023. Adherence to these tips will not only decrease the likelihood of a federal investigation by the FBI or OIG but may also help labs mitigate liability in the event of an unfavorable investigation.

Develop Written Standards of Conduct

The keystone of any clinical lab compliance program is the creation of written compliance policies. According to the OIG, “these policies should clearly delineate the policies of the laboratory with regard to fraud, waste and abuse and adherence to all guidelines and regulations governing federally funded health care programs.” Additionally, lab management should make these policies available to all employees, translating them into other languages when necessary.

Document Medical Necessity

Medicare and other federally funded healthcare programs will only pay for tests that are medically necessary. Of course, doctors are the ones who order these tests. However, according to the OIG, clinical labs are in a “unique position” to inform their physician clients that all testing must only be ordered to treat and diagnose a patient’s condition. Thus, it is imperative that molecular and respiratory labs retain all documentation of their independent determination that testing was medically necessary, including requisition forms containing diagnosis codes.

Ensure Accurate Billing Practices

The FBI and OIG are constantly on the lookout for patterns of billing mistakes that may evidence an intent to defraud the government. As a result, labs must ensure that “all claims for testing services submitted to Medicare or other federally funded health care programs are accurate and correctly identify the services ordered by the physician.” Labs must also only bill for testing services actually performed.

Frequently Evaluate Standing Orders

Standing orders for testing related to patients undergoing an extended course of treatment allow physicians, nursing homes, and labs to cut through some of the red tape. However, standing orders are also a source of significant fraud. Thus, molecular and respiratory labs should periodically review all standing orders, confirming with physicians or nursing homes that the testing remains necessary.

Review Marketing and Referral Relationships

Marketing and referrals are a necessary part of successfully running any clinical lab. However, there are also strict regulations on how labs structure their relationships with physicians, marketing firms, and consultants. Any marketing strategy employed by a lab must contain “honest, straightforward, fully informative and non-deceptive marketing.” Additionally, labs must ensure that all referral relationships do not violate federal healthcare fraud laws, such as the Anti-Kickback Statute. Finally, the OIG is especially concerned with the prices that labs charge doctors for patient profiles. According to OIG guidance, labs must “ensure that as tests are included in or added to profiles, the price for the enhanced profile increases, and the overall price for the profile is never below cost.” Otherwise, a lab may be in violation of the False Claims Act.

Retain all Records

According to the OIG, “one of the best ways to confirm that a compliance plan is effective is through reports that reflect results. Thus, labs should ensure that they retain all records such that they not only comply with state and federal law but also accomplish the goals of the compliance program. The OIG guidance aptly notes that this is an especially complex area, and labs should consult with legal counsel for assistance in understanding their retention protocol.

Tie Compliance to Performance Reviews

Management’s commitment to compliance is the heart of any compliance program. The FBI and OIG want molecular and respiratory labs to have more than a “paper” compliance policy; they want to see that management truly believes that compliance is an important part of their business and passes this belief on to employees. Thus, labs should tie performance reviews to an employee’s adherence to their compliance obligations.

While these elements of a compliance plan are all necessary, alone, they are insufficient to ensure ongoing compliance. Thus, it is essential that labs take additional efforts to not only get into compliance, but also remain in compliance. This involves the following:

  • Naming a dedicated compliance officer or compliance team;
  • Developing a system of ongoing education designed to keep employees apprised of all changes in the compliance landscape;
  • Enabling open lines of communication to facilitate the reporting of any potential violations;
  • Conducting internal monitoring, review, and auditing of existing compliance policies to ensure they are effective; and
  • Implementing a system to correct any employee misconduct that may result in a violation.

Developing a robust compliance policy is the single best way to avoid the scrutiny of the FBI and OIG. Additionally, DOJ prosecutors are instructed to consider a lab’s compliance policy when making charging decisions, allowing them to take a more lenient position towards labs that, despite their good-faith efforts, fell out of compliance. However, understanding what goes into a respiratory or molecular lab’s compliance policy requires a custom-tailored analysis of all risk factors and business practices. Thus, all clinical labs should consult with an experienced clinical lab compliance attorney for help developing their compliance program.

Contact the Knowledgeable Health Care Compliance Attorneys at Oberheiden, P.C.

If you operate a respiratory or molecular lab, it is imperative that you take compliance seriously. Otherwise, you risk civil—and potentially criminal—liability. At Oberheiden, P.C., our dedicated team of clinical lab compliance lawyers work closely with all types of labs to develop comprehensive, robust, and custom-tailored compliance programs that can help them stay out of the government’s cross-hairs. We have centuries of combined experience developing compliance programs, and several of our senior attorneys were previously employed in high-ranking positions within the federal government. This provides us with unrivaled knowledge of this complex regulatory environment, ensuring that any program we develop suits the exact needs of your lab. Our attorneys also represent clients in need of qui tam and healthcare fraud defense, involved in federal investigations, facing federal criminal charges, and in other legal matters. To learn more, give Oberheiden, P.C. a call at 1-888-680-1745. You can also connect with us through our online contact form.

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