OIG Compliance Program Guidance for Clinical Laboratories from Former OIG & DEA Agents
Clinical laboratories have substantial compliance obligations. In addition to general corporate compliance matters and compliance with the laws and regulations enforced by the U.S. Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA), this includes compliance with the standards established by the U.S. Department of Health and Human Services Office of Inspector General (OIG).
The OIG has jurisdiction over many aspects of clinical laboratories’ obligations—from marketing to billing, and from pricing to financial relationships with referring physicians. Clinical laboratory owners and executives need to devote the time and effort that OIG compliance demands, as failure to do so can lead to an audit or investigation with the potential for civil or criminal penalties.
Speak with a lab compliance consultant today for a free consultation.
Dr. Nick Oberheiden
Founder
Attorney-at-Law
John W. Sellers
Former Senior Trial Attorney
U.S. Department of Justice
Local Counsel
Joanne Fine DeLena
Former Assistant U.S. Attorney
Local Counsel
Lynette S. Byrd
Former Assistant U.S. Attorney
Partner
Amanda Marshall
Former U.S. Attorney
Local Counsel
Aaron L. Wiley
Former Federal Prosecutor
Local Counsel
Roger Bach
Former Special Agent (OIG)
Gamal Abdel-Hafiz
Former Supervisory Special Agent (FBI)
Chris Quick
Former Special Agent (FBI & IRS-CI)
Kevin M. Sheridan
Former Special Agent (FBI)
Ray Yuen
Former Supervisory Special Agent (FBI)
Dennis A. Wichern
Former Special Agent-in-Charge (DEA)
What Does OIG Compliance Entail for Clinical Laboratories?
The OIG has published a document titled, Model Compliance Plan for Clinical Laboratories. However, rather than providing a true model compliance plan, this resource from the OIG identifies several key areas of compliance for clinical laboratories and introduces the seven core elements of an effective OIG compliance program.
In its Model Compliance Plan for Clinical Laboratories, the OIG instructs that laboratories’ compliance programs should – at a minimum – address all of the following:
- Standards of Conduct – “Laboratories should develop standards of conduct . . . [that] 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.” Clinical laboratories’ standards of conduct must be custom-tailored to their specific operations, and they must address all aspects of FWA prevention and federal compliance.
- Medical Necessity – “Laboratory compliance plans should ensure that claims are only submitted to federally funded health care programs for services that the laboratory has reason to believe are medically necessary.” The OIG takes the position that labs cannot rely exclusively on physicians’ determinations of medical necessity. Not only that, but the OIG also expects laboratories to inform physicians when ordered tests do not qualify as medically necessary.
- Billing – “Laboratory compliance policies should ensure that all claims for testing services submitted to Medicare or other federally funded health care programs are accurate and correctly identify the services . . . performed by the laboratory.” Billing compliance is a top enforcement priority for the OIG, and laboratories that commit billing errors can expect the OIG to heavily scrutinize their compliance programs.
- Reliance on Standing Orders – “[W]hile laboratory compliance plans can permit the use of standing orders . . . [they] should require the laboratory to monitor existing standing orders to ensure their continuing validity.” The OIG expects clinical laboratories to have policies and procedures in place that ensure regular review standing orders from physicians, nursing homes, and other providers. This includes not only conducting regularly-scheduled reviews, but reviewing standing orders when specific concerns arise as well.
- Compliance with Applicable OIG Fraud Alerts – “Laboratory compliance plans should require that any and all fraud alerts issued by the OIG are carefully considered by the legal staff, chief compliance officer, or other appropriate personnel.” The OIG issues fraud alerts from time to time, and it expects clinical laboratories to monitor for these alerts and address them as necessary when they raise concerns within the context of laboratories’ operations.
- Marketing – “[L]aboratories that market their services should ensure that their marketing information is clear, correct, non-deceptive and fully informative.” Marketing compliance has been a priority for the OIG in recent years, and clinical laboratories must ensure that their marketing to patients, physicians, and other providers is accurate, substantiated, and otherwise compliant with federal law.
- Prices Charged – “The prices that laboratories charge, particularly to physicians and especially for profiles, raise compliance issues that should be addressed in a laboratory’s written compliance policies.” Laboratories’ pricing policies can have implications under the False Claims Act, Anti-Kickback Statute, and various other federal laws. In order to avoid engaging in prohibited practices (including having discounts and other incentives classified as “kickbacks”), laboratories must thoroughly address the pertinent federal restrictions in their OIG compliance programs.
- Records Retention – “One of the best ways to confirm that a compliance plan is effective is through reports that reflect results.” Not only does the OIG expect clinical laboratories to develop written compliance policies and procedures, but it also expects labs to generate and store documentation of compliance on an ongoing basis. During audits and investigations, OIG personnel will specifically request this documentation, and failure to provide it will be considered a significant red flag.
- Compliance as an Element of Performance – “To ensure that corporate integrity rises to the level of importance required . . . compliance programs should require that . . . adherence to compliance be an element in evaluating the performance . . . .” This applies to managers and supervisors as well as individual contributors in the lab’s billing, marketing, and laboratory services departments.
Keep in mind that this is not a comprehensive list of clinical laboratories’ compliance obligations, but rather an overview of some of the OIG’s enforcement priorities. As a result, while incorporating policies and procedures that address these issues into a lab’s compliance program is important, it is not necessarily sufficient to avoid penalization when faced with OIG scrutiny.
The OIG’s Compliance Program Guidance for Clinical Laboratories
How should clinical laboratories address these issues (among others) in their OIG compliance programs? The OIG identifies the following as the seven core elements of an effective compliance plan:
1. Written Procedures and Policies
The OIG instructs that clinical laboratories should adopt written procedures and policies which address all of the areas discussed above. These procedures and policies should be tailored specifically to the size and nature of the laboratory’s operations as well as its payors and its relationships with physicians and other providers. The OIG also makes clear that developing these procedures and policies should not be a one-time event, but rather an ongoing process that addresses a lab’s changing compliance obligations over time.
2. Designation of a Compliance Officer (or Equivalent)
The OIG’s compliance program guidance for clinical laboratories states that all laboratories should designate a compliance officer or compliance committee. Depending on the lab’s size and resources, this may be a stand-alone position, or it may be a position held by one of the lab’s executives. In either case, the compliance officer or members of the lab’s compliance committee should have sufficient time devoted to overseeing and managing the lab’s federal compliance obligations.
3. Education and Training
Once a clinical laboratory has developed its initial (or updated) compliance procedures and policies, it should provide adequate education and training to its personnel. While all personnel should be made aware of a lab’s compliance procedures and policies, the OIG emphasizes the importance of training for personnel involved in, “billing, sales, marketing and specimen collection and/or test ordering.” Even in the absence of updates requiring additional education, a clinical laboratory compliance program should include provisions for refresher training on a periodic basis.
4. Communication
The OIG also emphasizes the importance of open communication between laboratory staff and the facility’s compliance officer or committee. Its compliance program guidance calls for an, “open door, complete anonymity, non-retribution policy.” Clinical laboratories’ compliance procedures and policies should provide guidance for how employees can anonymously report their concerns regarding compliance, and it should make clear that under no circumstances will employees be punished for coming forward with information about potential compliance deficiencies.
5. Auditing and Monitoring
Auditing and monitoring are essential to effective compliance, and the OIG notes that it will, “be critical of compliance plans and programs that exist on paper but are not earnestly implemented or enforced.” The OIG states that zero tolerance “should be the goal,” and that laboratories should periodically assess all aspects of their compliance efforts in order to determine whether (i) they are sufficient, or (ii) there are shortcomings or failures that need to be addressed.
6. Disciplinary Action
The OIG’s compliance program guidance for clinical laboratories indicates that labs should adopt and enforce disciplinary policies that relate specifically to non-compliance. Labs’ written policies should include clear guidance for consistent disciplinary enforcement, and they should clearly delineate, “the degrees of disciplinary actions that can be imposed upon employees for failing to comply.”
7. Corrective Action
In addition to taking disciplinary action against employees who are responsible for compliance failures, clinical laboratories must also take corrective action to remedy these failures. Labs should have documented procedures for responding to suspected and identified issues, and they should have mechanisms in place to ensure that issues are appropriately addressed internally (i.e. through updates to the lab’s compliance program) and externally (i.e. through corrective billing).
Speak with a Lab Compliance Consultant or Former OIG Agent at Oberheiden P.C.
Does your clinical laboratory’s compliance program need an overhaul? Do you have questions about whether your lab is doing enough to meet its federal compliance obligations? If so, we can help. To speak with a lab compliance consultant, healthcare compliance lawyer or former OIG agent in confidence, call 888-680-1745 or request a free consultation online today.
