Physician-Owned Labs Under Intense Billing Scrutiny

LAS VEGAS—Clinical drug testing plays important roles in chronic pain management and addiction treatment, and can be revenue centers for physician practices. But unnecessary or cookie-cutter testing and improper billing are increasingly dangerous mistakes that can trigger audits and even criminal investigations, warned Jennifer Bolen, JD, of The Legal Side of Pain, a division of the The J. Bolen Group, LLC, Nashville, Tennessee, during the session at PAINWeek 2014 titled, “Physician Office Laboratories: Myths and Realities.”

Therapeutic Drug Monitoring laboratories are under intense regulatory scrutiny following revelations of significant fraud and abuse associated with lab testing, and inappropriate relationships between physicians and third parties.

Physician-owned labs (POLs) must work to ensure they are complying with self-referral and anti-kickback rules, fee-splitting, and importantly, billing, and coding issues.

Physicians can minimize their potential for getting entangled in fraud schemes or inappropriate billing by implementing “solid compliance programs,” she said.

Government audits of POLs increasingly focus on “lack of medical necessity” and improper documentation of medical necessity and inappropriate coding of qualitative drug screens. POLs and referring physicians must also be very careful to avoid the appearance of inducements or kickbacks.

Up-coding – billing for a more expensive but similar test than was actually performed – is another red flag and a potentially very costly mistake.

“One significant federal search warrant involving an alleged fraud scheme involving billing semi-quantitative immunoassay testing as quantitative or definitive testing to wrongfully obtain higher reimbursement,” for example, Ms. Bolen said. The government's $135 million-plus case centered on a company placing chemistry analyzers into POLs and allegedly providing inappropriate billing and coding advice to those labs, she explained.

The lessons of such cases include the importance of proper chart notes and documentation of why a particular lab test was undertaken, and the demonstrable use of test results in subsequent patient treatment.

Testing should also be “individualized” to each patient rather than the same suite of tests being ordered for all patients, Bolen cautioned.

“If you already have your own laboratory, perform a self-audit,”  Bolen urged. Review POL instrumentation, billing and coding, medical necessity and individualization of testing, test panels and documentation, she advised.

Many people wrongly assume that POLs do not have to follow the same rules as other accredited clinical labs when it comes to testing processes, and billing and coding, Ms. Bolen noted.

But that's a dangerous myth.

Physicians can land in trouble by collecting point-of-care specimens to screen patients, and noting and acting on the results of that point-of-care testing, but then sending specimens to a POL High Complexity Analyzer for more sophisticated screening, she noted.

It's a myth that “a POL with a high-complexity analyzer can bill for confirmation testing of a point-of-care test,” Bolen warned. “In reality, this conduct may get you investigated.”
Loading links....