Wachler & Associates Health Law BlogOIG Focusing on Clinical Laboratories
The HHS Office of Inspector General (OIG) recently updated its work plan to announce two new initiatives directed towards clinical laboratories billing Medicare for laboratory tests. The OIG work plan includes the various projects, audits, evaluations, and reviews that OIG is planning or that are currently underway. Medicare providers often experience the downstream effects of OIG projects or are directly the subject of OIG projects, and should therefore be aware of OIG’s enforcement priorities.
First, OIG intends to review trends and vulnerabilities in genetic tests covered under Medicare Part B. OIG noted the steady increase in Medicare expenditures on genetic tests, as well as the higher average per-test payment amount of these tests when compared to other laboratory tests under Part B. OIG asserted that it had identified genetic testing fraud schemes involving deceptive telemarketing campaigns and kickbacks. Pursuant to this project, OIG will examine avenues for strengthening oversight of genetic tests covered under Part B, including identifying tests that may be vulnerable to fraud, waste, and abuse; assessing trends among laboratory test providers; and examining whether geographic variations exist, particularly between jurisdictions that do and do not participate in the Molecular Diagnostic Services Program.
Second, OIG intends to review Medicare payments to providers for some expanded laboratory panels. OIG noted that expanded panels (those that can detect six or more pathogens) result in higher Medicare payments than targeted panels (those that can detect up to five pathogens). OIG stated it has concerns that providers have been administering expanded laboratory panels when targeted laboratory panels would be sufficient, resulting in significantly higher Medicare payments to those providers. OIG intends to determine whether Medicare has paid providers for some selected expanded panels that are not medically necessary, do not meet Local Coverage Determination (LCD) requirements, or otherwise do not meet Medicare requirements.
Clinical laboratories have long been the subject of Medicare audit and enforcement projects. Laboratories are in a somewhat unique and difficult position because they do not determine the medical necessity of the tests they perform or bill to Medicare, but they are often nonetheless held responsible for billing Medicare for allegedly unnecessary tests. Laboratories should prospectively consider what documentation they require from ordering providers before performing or billing a test. Telemedicine arrangements and financial relationships with referral sources have also long been enforcement priorities, both in regard to clinical laboratories and other provider types. Laboratories engaged in or considering either of these practices should carefully analyze the complex laws and regulations that govern these practices in order to enhance their compliance with federal and Medicare requirements.
For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to OIG reviews or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.