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Toxicology Compliance Programs: A Safeguard Against OIG-Investigations

Categories: Compliance

toxicology compliance
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Recently, government auditors have begun to take a closer look at the distribution and billing practices of toxicology laboratories. Because many laboratories are either directly (laboratory syndication) or indirectly (MSO) affiliated with or owned by referring physicians, important healthcare laws such as the Stark Law and Anti-Kickback regulations may apply to the analysis. This brief article portrays how a professionally set up compliance programs can mitigate the regulatory risk factors for toxicology laboratories and their owners.

Purpose and Goals of Compliance Programs

Purpose of a healthcare compliance program is to establish, monitor, and optimize lawful operations. Because errors are common in all complex entities, it is important to put mechanisms in place that demonstrate to auditors that mistakes, if any, occurred unintentionally. The best way to show your intent to comply with applicable laws is to establish a credible and effective compliance program.

As many of us at Oberheiden & McMurrey, LLP have served as federal prosecutors in charge of healthcare investigations, we know first hand that the existence of compliance officers and documented compliance efforts may greatly impact the outcome of any audit. Regardless of the timing, and it is never too late, executives in charge of toxicology and other laboratories, should strongly consider a meaningful compliance program to build a wall against government intrusions.

What Is a Compliance Program?

A compliance program consists of three features: policies, training, and enforcement.

  • Compliance Officers
  • Compliance Training
  • Written Manuals and Policies
  • Open Communication Channels
  • Policy Monitoring
  • Policy Enforcement

Each laboratory should maintain good documentation and carefully collect and archive its contracts and policies. The following is a classic list of documents that should be part of a corporate reservoir.

  • Code of Ethics, Conduct, and Policies
  • Documented Compliance Training
  • Operating or Company Agreement
  • Physician Investor Information
  • Employment & 1099 Agreements
  • Consulting and Expert Agreements
  • Employment Manual

Educating staff and owners about what is important to the company is the logical next step in an effective corporate compliance program. We suggest to have respected and recognized healthcare experts train the company’s employees and contractors periodically on the following topics:

  • Fraud and Abuse Laws
  • Stark Law
  • Anti-Kickback Rules
  • Patient Privacy Rights (HIPAA & OSHA)
  • Billing and Coding
  • Handling Securities (PPMs)

Commercial v. Federal Labs

Recently, our attorneys have noticed a trend by law enforcement to also subject so-called commercial laboratories (i.e. laboratories that do not accept federally funded referrals) to federal scrutiny. We have defended a great number of commercial labs that received subpoenas from federal authorities and we strongly recommend to extent compliance efforts to those non-federal labs. Clearly, our experience tells us that simply carving out federal business no longer keeps the federal government away from taking a look at non-federal labs’ operations and billing practices. Admittedly, in some of the cases we have served as counsel we saw that the suggested wall of separation between private and federal laboratories often only existed on paper. In these cases, the government argued that significant operational overlap, shared space, shared staff, and common ownership between commercial and non-commercial labs watered down needed segregation and separation.

  • Collectors are paid on commercial and federal business
  • Staff is shared between commercial and federal lab
  • Medical directors work in both labs
  • Physicians get extra distribution or other form of credit for sending federal business
  • Marketers are being paid commissions on federal business
  • Physicians’ family members are involved in the federal business

Our Experience

Our attorneys have profound expertise when it comes to defending toxicology laboratories and their owners against audits, OIG and Grand Jury subpoenas. Our experience is based on three columns.

  • First, Oberheiden & McMurrey, LLP has represented laboratories in critical investigations involving the Office of Inspector General, the Department of Health and Human Services, the FBI, the Department of Defense, and other law enforcement agencies; many of these investigations resulted in no civil and no criminal liabilities for our clients. These results were made possible in part due to the existence of a compliance program or our rapid and credible establishment of one during the investigation.
  • Second, in addition to our defense practice, our attorneys have advised a great number of laboratories on establishing good and defendable operations. Our paperwork, co-written by former prosecutors from the Department of Justice in charge of civil and criminal healthcare matters, routinely passes the test of federal law enforcement scrutiny.
  • Third, as mentioned, several of our attorneys have previously overseen healthcare prosecutions during their tenures at the U.S. Attorney’s Office. From these decades of senior governmental experience, we know exactly what type of wrongdoing the government investigates and what trends in healthcare law enforcement our clients need to be aware of. Among our attorneys with previous government background are former senior officials from the Department of Justice and former members of the prestigious Medicare Fraud Strike Force.

Our Attorneys

  • Dr. Nick Oberheiden, founder and principal of Oberheiden & McMurrey, LLP, focuses his practice on crisis management, healthcare compliance, and federal criminal defense. Mr. Oberheiden has set up, monitored, and supervised healthcare compliance programs for clients from all industries and from across the country and he has thus built effective walls for his clients, before, during, or after government investigations.
  • Lynette S. Byrd focuses her practice on civil and criminal litigation, Medicare and insurance audits, and general advice and counseling in health care law. She is a former Assistant United States Attorney with years of substantial trial experience under her belt who merges excellent litigation skills with profound understanding of the law.

Recent Toxicology Representations

Oberheiden & McMurrey, LLP is routinely called to defend individual and corporate clients in civil and criminal healthcare investigations. Below are the outcomes of some of our recent engagements.

  • Investigation against Toxicology Lab (Department of Justice)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Medicare Fraud)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Department of Defense)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (OIG)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Department of Labor)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Department of Justice)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (U.S. Attorney’s Office)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Dept. Health & Human Serv)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (OIG)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (OIG)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (U.S. Attorney’s Office)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (Dept. Health & Human Serv)
    Result: No civil or criminal liability, case dismissed.
  • Investigation against Toxicology Lab (OIG)
    Result: No civil or criminal liability, case dismissed.

If you are under investigation or if you are interested in setting up a healthcare compliance program for your healthcare business, you should give Nick a call today to discuss your options.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden & McMurrey, LLP is a Texas LLP with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

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