Thousands of laboratories nationwide will be happy to hear that Florida, which licenses in-state as well as out-of-state laboratories, has repealed its laboratory licensure requirements.  As of July 1, 2018, laboratories doing business in Florida need only maintain CLIA certification. Continue Reading Florida Repeals Laboratory Licensure Requirements Effective July 1st

Like prior years, 2017 saw large government recoveries and a high volume of False Claims Act (“FCA”) cases, which remain the government’s primary health care enforcement tool. The Department of Justice (“DOJ”) reported on December 21, 2017 that it obtained $3.7 billion in FCA settlements and judgments during the fiscal year (“FY”) ending September 30, 2017, down from $4.7 billion in FY 2016. Federal recoveries from the health care industry (including drug companies, hospitals, pharmacies, laboratories, and physicians), however, remained consistent:  $2.4 billion in FY 2017 compared to $2.5 billion in FY 2016.

DOJ also reported that relators filed 669 qui tam FCA lawsuits last year, an average of more than 12 new cases every week. Among this high volume of qui tam FCA cases, relators asserted myriad theories of FCA liability against many different types of health care providers and suppliers.

In 2017, courts issued numerous decisions interpreting the legal standards under the FCA and assessing the viability of a multitude of FCA liability theories. These decisions will affect the prosecution and defense of FCA cases for years to come. In particular, district and appellate courts grappled with the Supreme Court’s 2016 decision in Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (“Escobar”). Given the large volume of decisions under Escobar, we will discuss the application of that decision in tomorrow’s post. Continue Reading Health Care Enforcement Year in Review and 2018 Outlook: Major Case Law Developments

The long-running test-referral prosecution against Biodiagnostic Laboratory Services, LLC (“BLS”), a New Jersey clinical blood testing laboratory; its owner and employees; and BLS’s referring physicians recently reached another milestone. In a criminal case that the U.S. Attorney’s Office for the District of New Jersey has called the “largest physician bribery case ever prosecuted,” resulting in 40 guilty pleas, BLS was sentenced on June 28, 2016 and ordered to forfeit all of its assets.

In addition, on June 30, 2016, the 27th BLS referring physician pleaded guilty to charges that he violated the Federal Travel Act by taking bribes from BLS. The physician admitted that, between April 2011 and June 2012, BLS paid him approximately $1,500 per month. This physician plea is another in the long line of individual criminal pleas, 38 of which are catalogued here. Continue Reading Biodiagnostic Laboratory Services Sentenced; Another Physician Pleads Guilty

On April 8th I will be presenting in a Health Care Compliance Association webinar entitled “Hot Topics in Laboratory Compliance.”  My co-presenter is Rob Rossi, Senior Vice President and Chief Compliance Officer, Calloway Laboratories.   Rob is a seasoned laboratory industry veteran who also has served as General Counsel of a pathology laboratory and who has spent time in state government.  Together we will offer legal guidance while taking into account the operational and business challenges laboratories face in today’s health care enforcement environment.  Laboratories seem to be in the spotlight lately, as evidenced by the HHS OIG’s issuance of last year’s Special Fraud Alert on payments by laboratories to referring physicians and Advisory Opinion 15-04 addressing a proposed business arrangement between a laboratory and its physician practice clients.  If you are interested in learning more about these issues, there is still plenty of time to register.

This week a federal district court in Ohio ruled in favor of Mobilex USA (Mobilex), the country’s largest mobile medical imaging company, on a motion for summary judgment in a False Claims Act (FCA) suit filed by a former employee, Kevin P. McDonough.  McDonough accused Mobilex of underpricing imaging services supplied to Medicare Part A beneficiaries so that it could obtain more lucrative Medicare Part B business.  Mobilex bills nursing homes directly, based on negotiated contracted rates, for Medicare Part A services because the nursing homes receive a per diem payment that covers most services, including mobile imaging, furnished to Medicare Part A beneficiaries.  The contracted rates typically are less than what Mobilex receives when it bills Medicare directly for Part B services.  McDonough alleged that this scheme of underpricing one service to secure additional business – commonly referred to as “swapping” – violated the Anti-Kickback Statute (AKS), which in turn led to violations of the FCA. Continue Reading Federal Court Rejects Relator’s Swapping Allegations in False Claims Act Case

Written by Samantha Kingsbury and Karen Lovitch

New legislation enacted last month will change the way many laboratories do business in Pennsylvania.  Senate Bill 1042 (SB 1042), which amends Pennsylvania’s Clinical Laboratory Act (the Act), now prohibits several practices that are common across the clinical laboratory industry, including placement of laboratory employees in physician offices.  Because SB 1042 applies to all laboratories, regardless of where they are headquartered, its potential impact is far-reaching and likely will cause laboratories to reevaluate their business models and practices in the Commonwealth. Continue Reading Changes Ahead for Laboratories Doing Business in Pennsylvania

At long last, the Office of Inspector General for the Department of Health and Human Services (OIG) and the Centers for Medicare & Medicaid Services (CMS) have finalized regulations amending the Anti-Kickback Statute safe harbor and the Stark Law exception, respectively, for donation of electronic health records (EHR) items and services. Continue Reading OIG and CMS Permit EHR Donations Through 2021, Except for Labs

The Office of Inspector General for the Department of Health and Human Services (OIG) and the Centers for Medicare & Medicaid Services (CMS) have proposed to extend the sunset date on the safe harbor and exception for donation of electronic health records (EHR) items and services to December 31, 2016.  According to CMS and the OIG, an extension in the sunset date is necessary because use of EHR technology “has not yet been universally adopted nationwide, and continued [EHR] technology adoption remains an important….goal.” Continue Reading Extension of EHR Donation Sunset Date Proposed by OIG/CMS

Yesterday the Centers for Medicare & Medicaid Services (CMS) published a final rule with comment period implementing the Medicare Physician Fee Schedule for 2013, and it covers a number of  issues of interest to independent laboratories.  Most importantly, payment for the technical component of surgical pathology (CPT Code 88305) will decrease by about 52% as of January 1st, if the conversion factor remains the same.   Although payment for the profession component will rise by 2%, and CMS noted the Obama Administration’s commitment to preventing the 26.5% reduction based on the Sustainable Growth Rate methodology from taking effect, these measures are cold comfort for the laboratory industry.  The College of American Pathologists has posted an informative Special Report providing details about other pathology payment changes. Continue Reading 2013 Medicare Physician Fee Schedule: Issues of Interest to Independent Laboratories