[Federal Register Volume 62, Number 41 (Monday, March 3, 1997)]
[Notices]
[Pages 9435-9441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5192]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of the OIG Model Compliance Plan for Clinical
Laboratories
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth the recently issued
model compliance plan for clinical laboratories developed by the Office
of Inspector General in cooperation with, and input from, several
provider groups and industry representatives. Many providers and
provider organizations have expressed an interest in better protecting
their operations from fraud through the adoption of compliance plans.
We believe the development of this initial model compliance plan for
clinical laboratories will serve as a positive step towards promoting a
higher level of ethical and lawful conduct throughout the health care
industry.
FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Counsel to
the Inspector General, (202) 619-0089.
SUPPLEMENTARY INFORMATION: The creation of model compliance plans has
become a major initiative of the Office of Inspector General (OIG) in
its effort to engage the private health care community in the fight to
combat fraud and abuse. In developing these compliance plans, the OIG
continues to work closely with the Health Care Financing Administration
and various sectors of the health care industry.
The clinical laboratory model compliance plan represents the OIG's
initial effort to develop such a plan for use by the industry. The plan
considers elements of the Federal Sentencing Guidelines and policy
guidance given to major independent laboratories through corporate
integrity agreements. Specifically, this model plan recommends that
clinical laboratories implement a number of substantive changes, such
as developing better requisition forms and policies that promote the
physician's right to order only medically necessary tests.
Adoption of the clinical laboratory model compliance plan set forth
below, and future model compliance plans for other health care
providers, will be voluntary. All future models will be similarly
structured, that is, substantive policy recommendations resulting from
our investigations and civil settlements combined with the elements of
the Federal Sentencing Guidelines.
A reprint of the OIG model compliance plan follows.
MODEL COMPLIANCE PLAN FOR CLINICAL LABORATORIES
Introduction
The Office of Inspector General (OIG) of the Department of Health
and Human Services (HHS) and other Federal agencies charged with
responsibility for enforcement of Federal law have emphasized the
importance of voluntarily developed and implemented compliance plans.
In recent years, the OIG has been asked to supply guidance as to the
elements of a model compliance plan. The purpose of this issuance,
therefore, is to respond to those requests by providing some guidance
to health care providers that supply clinical laboratory testing
services for Medicare and Medicaid beneficiaries. Like other compliance
plan models that will be issued for other areas of the health care
community, this guidance is based upon the OIG's experience in fraud
investigations of clinical laboratories, the Health Care Financing
Administration's (HCFA) regulations and guidelines, requirements
imposed on clinical laboratories in corporate integrity agreements
negotiated by the OIG, and input from the clinical laboratory industry.
The government, especially the OIG, has a zero tolerance policy
towards fraud and abuse and will use its extensive statutory
authorities to reduce fraud in Medicare and other federally funded
health care programs. Compliance plans offer the health care provider
an opportunity to participate in a nationwide effort to reduce fraud
and abuse in our national health care programs. The OIG believes that
through a partnership with the private sector, significant reductions
in fraud and abuse can be accomplished. Compliance plans offer a
vehicle to achieve that goal.
This information is being supplied to assist laboratory providers
in crafting and refining their own compliance plans. Elements of these
guidelines can be used by all laboratories, regardless of size, to
establish a compliance program. We are not suggesting that all
laboratories must implement all of the compliance elements discussed in
this document, nor do we suggest that a laboratory that does not
incorporate all of these elements will be at a disadvantage when under
the scrutiny of the OIG or other governmental agency. Rather, these
guidelines represent the government's suggestions on how to correct and
prevent fraudulent activity, and they can be tailored to fit the
individual needs and financial realities of any clinical laboratory, be
it an independent national laboratory, a hospital laboratory, or a
small, regional laboratory. We expect variations reflecting the
specific factual context in which each individual laboratory operates.
This model compliance plan focuses on topic areas recently
addressed in corporate integrity agreements with several players in the
laboratory industry. Consequently, this model laboratory compliance
plan is not all inclusive as to subject matter. We recognize that
laboratories are accountable for complying with far more laws,
regulations and guidelines than we have tried to cover in this model,
and we believe that laboratories implementing compliance plans should
address any and all areas where abuse may be prevalent in the industry.
For example, the OIG suggests that laboratory compliance programs
should include training on topics such as, the anti-kickback act, Stark
self-referral issues and CLIA requirements. Depending on the nature of
its business, a laboratory also may need to add specific measures
covering areas such as ESRD testing and billing, which is governed by
rules and regulations and which has been subject to abuse by many
companies. Ultimately, each company bears the responsibility for
[[Page 9436]]
determining the appropriate topic areas and measures to be included in
its compliance program.
We see this model compliance plan as a dynamic document, and
therefore, one that may be modified or expanded as we gather more
information and knowledge about best practices and successful
compliance plans. Through this document, we are attempting to provide
guidance and structure to assist providers as they attempt to comply
with our civil, criminal and health care laws. All providers should be
aware that the development and implementation of compliance programs
can raise a host of sensitive and complex legal issues. Nothing stated
herein should substitute for or be used in lieu of legal advice from
competent, experienced counsel. In addition, it should be noted that
implementing a compliance program will not provide a laboratory with
immunity from criminal, civil or administrative prosecution, but it may
be a relevant factor in negotiations with the Office of Inspector
General.
Compliance Plan Elements
Every laboratory adopting a compliance plan should develop a
program and policies that ensure that the plan is implemented and
enforced. Compliance plans that are merely cosmetic are not effective
and, in the long run, may harm the laboratory. The OIG suggests that
the comprehensive compliance program should include, at a minimum, the
following elements: (1) Written standards of conduct for employees; (2)
the development and distribution of written policies that promote the
laboratory's commitment to compliance and that address specific areas
of potential fraud, such as billing, marketing and claims processing;
(3) the designation of a chief compliance officer or other appropriate
high-level corporate structure or official who is charged with the
responsibility of operating the compliance program; (4) the development
and offering of education and training programs to all employees; (5)
the use of audits and/or other evaluation techniques to monitor
compliance and ensure a reduction in identified problem areas; (6) the
development of a code of improper/illegal activities and the use of
disciplinary action against employees who have violated internal
compliance policies or applicable laws or who have engaged in
wrongdoing; (7) the investigation and remediation of identified
systemic and personnel problems; (8) the promotion of and adherence to
compliance as an element in evaluating supervisors and managers; (9)
the development of policies addressing the non-employment or retention
of sanctioned individuals; (10) the maintenance of a hotline to receive
complaints and the adoption of procedures to protect the anonymity of
complainants; and (11) the adoption of requirements applicable to
record creation and retention. These compliance program elements are
spelled out in greater detail below.
A. Written Procedures and Policies
Laboratory compliance plans should require the development and
distribution of written compliance policies. These policies should be
developed under the supervision and direction of the chief compliance
officer or the equivalent and should, at a minimum, be provided to all
individuals who are affected by the specific policy at issue. One
convenient method of achieving this goal and maintaining policies is to
create a three-ring compliance policy notebook. This format permits the
filing of new and amended or revised compliance policies and ensures
that affected individuals have easy access to the laboratory's written
policies.
1. Standards of Conduct
Laboratories should develop standards of conduct for all employees
which 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. These standards should
be made available to and understandable by all employees (e.g.,
translated into other languages, if necessary) and regularly updated as
the policies and regulations of these programs are modified.
2. 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. Upon
request, a laboratory should be able to provide documentation, such as
requisition forms containing diagnosis codes, supporting the medical
necessity of a service the laboratory has provided and billed to a
Federal program. We recognize that laboratories do not and cannot treat
patients or make medical necessity determinations. However, there are
steps that such facilities can and should take to help maximize the
likelihood that they only bill federally funded health care programs
for tests that meet the reimbursement rules for those programs.
As a preliminary matter, the OIG recognizes that physicians must be
able to order any tests, including screening tests, that they believe
are appropriate for the treatment of their patients. However, we
believe that physicians must be made aware that Medicare will only pay
for tests that meet the Medicare definition of ``medical necessity''
and that Medicare may deny payment for a test that the physician
believes is appropriate, such as a screening test, but which does not
meet the Medicare definition of medical necessity. The laboratories
themselves are in a unique position to deliver this information to
their physician clients.
In our opinion, laboratories can and should advise physicians that
when they instruct the laboratory to seek Medicare reimbursement for
tests ordered, they should only order those tests that they believe are
medically necessary for the diagnosis and treatment of their patients.
We recommend that laboratories implement the following steps through
their compliance plans or some other appropriate mechanism to help
ensure, as best they can, that the claims they submit to federally
funded health care programs meet the appropriate program requirements:
a. Requisition Design: Each laboratory (or laboratory company)
should standardize its noncustomized test offerings and use common,
uniform requisition forms that emphasize physician choice and encourage
doctors to order, to the extent possible, only those tests that they
believe are appropriate for each patient. In addition, the requisition
forms should require physicians to document the need for each test
ordered by inserting a diagnosis code for each such test. With respect
to chemistry tests, requisition forms should be designed to require
physicians to order such tests individually (i.e., separately) unless:
(1) the test is specifically part of a CPT or HCPCS defined automated
multichannel test series (e.g., 80002-80019, G0058-G0060 which will be
amended to G0095-G0098); (2) the test is part of a CPT-defined
``clinically relevant test grouping'' such as an organ or disease panel
or profile (e.g., 80050-80099); or (3) the test is part of a profile
that has been customized at the request of the physician. In addition,
a printed statement should appear on every requisition form reiterating
that when ordering tests for which Medicare reimbursement will be
sought, physicians (or other individuals authorized by law to order
tests ) should only order tests that are medically necessary for the
diagnosis or treatment
[[Page 9437]]
of a patient, rather than for screening purposes.
b. Notices to Physicians: All laboratories should provide all of
their clients with annual written notices that set forth: (1) The
Medicare medical necessity policy; (2) the individual components of
every laboratory profile that includes a multichannel chemistry test or
other automated multiple test result (e.g., 80002-80019, G0058-G0060);
(3) the CPT or HCPCS codes that the laboratory uses to bill the
Medicare program for each such profile; (4) the Medicare National
Limitation Amount for each CPT or HCPCS code used to bill Medicare for
each profile and its components; and (5) a description of how the
laboratory will bill Medicare for each profile. If the laboratory
engages a physician clinical consultant, the notice also should provide
the phone number of the physician clinical consultant and advise of his
or her availability to discuss appropriate testing and test ordering.
In addition to the general notices above, laboratories offering
clients the opportunity to create customized profiles should provide
all clients who request customized profiles with annual notices that:
(1) Explain the Medicare reimbursement paid for each component of each
such profile; (2) encourage physicians who are ordering tests for which
Medicare reimbursement will be sought to order only tests that are
medically necessary for each patient; (3) inform physicians that using
a customized profile may result in the ordering of tests for which
Medicare may deny payment; and (4) inform physicians that the OIG takes
the position that a physician who orders medically unnecessary tests
for which Medicare reimbursement is claimed may be subject to civil
penalties. Once again, if the laboratory engages a physician clinical
consultant, the notice also should provide the phone number of the
physician clinical consultant and advise of his or her availability to
discuss appropriate testing and test ordering.
c. Physician Acknowledgments: Laboratories that agree to customize
profiles in response to physician requests should require such
requesting physicians to sign a Physician Acknowledgment. By signing
the Physician Acknowledgment, the physician would affirm that: (1) The
physician has requested the creation of a custom profile that includes
the tests listed on the acknowledgment; (2) the physician has been
informed of the reimbursement amount that Medicare (and where
appropriate, Medicaid) will pay for each test included in each
customized profile; (3) the physician understands that when ordering
tests for which Medicare reimbursement will be sought, the physician
should only order those tests which the physician believes are
medically necessary for each patient; (4) the physician knows that
using a customized profile may result in the ordering of tests for
which Medicare or other federally funded health care programs may deny
payment; (5) the physician will order individual tests or a less
inclusive profile when not all of the tests included in the customized
profile are medically necessary for an individual patient; (6) the
physician has been informed that the OIG takes the position that a
physician who orders medically unnecessary tests may be subject to
civil penalties; and (7) if appropriate, the physician is aware that
the laboratory makes available the services of a clinical consultant to
assist the physician in ensuring that appropriate tests are ordered.
d. Test Utilization Monitoring: The OIG believes that laboratories
can and should take the steps described above to help ensure that
physicians will make a determination and document the medical necessity
of tests billed to the Medicare program. We also believe that there are
steps laboratories can take to determine whether physicians are being
encouraged to order medically unnecessary tests. The OIG believes that
a laboratory which has reason to believe that its clients are ordering
medically unnecessary tests has a duty to determine why that behavior
has occurred. More importantly, if the laboratory discovers that it has
in some way caused that behavior, we believe the laboratory has the
duty to correct the cause.
Recognizing that there may be other ways to do so, the OIG suggests
the following methodology for monitoring test utilization and detecting
ordering abuses. We suggest that laboratories retain and analyze test
utilization data from year to year, by CPT or HCPCS code, for the top
30 tests they perform for Medicare beneficiaries. Laboratories could do
this by keeping track of the number of tests performed by CPT or HCPCS
code or of the number of claims submitted to Medicare for each test.
The laboratories would then compute the percentage growth in claims
submitted for each of the top 30 tests from one year to the next. We
believe that if a test's utilization grew more than 10 percent, the
laboratory should undertake a reasonable inquiry to ascertain the cause
of such growth. If the laboratory determines that the increase in test
utilization occurred for a benign reason, such as the acquisition of a
new laboratory facility, then the laboratory need not take any action.
However, if the laboratory determines that the increase in utilization
was caused by the use of basic chemistry profiles or some other action
on the part of the facility, the laboratory should take any steps that
it deems reasonably necessary to address the issue and to insure that
fraud is not being committed.
3. 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 ordered
by the physician (or other individual authorized by law to order tests)
and performed by the laboratory.
a. Selection of CPT or HCPCS Codes: Laboratory compliance policies
should ensure that the CPT or HCPCS code that is used to bill Medicare
or Medicaid accurately describes the service that was ordered and
performed. Laboratories should choose only the code that most
accurately describes the ordered and performed test. To ensure code
accuracy, laboratories may wish to include a requirement that the codes
be reviewed by individuals with technical expertise in laboratory
testing before such codes are approved for claims submissions. The OIG
views intentional up coding (i.e., the selection of a code to maximize
reimbursement when such code is not the most appropriate descriptor of
the service) as raising false claims issues. If a laboratory continues
to have questions about code selection, even after review by technical
experts, the facility should direct its questions to its Medicare
carrier or intermediary.
b. Selection of ICD-9CM Codes: At the direction of the Health Care
Financing Administration (HCFA), Medicare carriers and intermediaries
have established lists of tests that must be accompanied by diagnostic
information to establish medical necessity before Medicare coverage
will be assumed (``limited coverage policy''). Such diagnostic
information may be submitted either through the use of ICD-9CM codes or
a narrative description. Laboratory compliance policies should direct
that laboratories will only submit diagnostic information obtained from
the test ordering physician. Laboratories should not: (1) Use
diagnostic information provided by the physician from earlier dates of
service (other than standing orders, as discussed below at paragraph
(4)); (2) use ``cheat sheets'' that provide diagnostic information that
has triggered reimbursement in the past; (3) use
[[Page 9438]]
computer programs that automatically insert diagnosis codes without
receipt of diagnostic information from the physician; or (4) make up
diagnostic information for claims submission purposes. Laboratories
should: (1) Contact the ordering physician to obtain diagnostic
information in the event that the physician has failed to provide such
information; (2) provide services and diagnostic information supplied
pursuant to a standing order executed in connection with an extended
course of treatment; and (3) accurately translate narrative diagnoses
obtained from the physician to ICD-9CM codes. Where diagnostic
information is obtained from a physician or the physician's staff after
receipt of the specimen and the requisition form, documentation of the
receipt of such information should be created and maintained.
c. Tests Covered by Claims for Reimbursement: Laboratory compliance
policies should ensure that the laboratory only submits claims for
tests that were both ordered and performed. If a laboratory receives a
specimen without a test order or with an ambiguous test order that is
subject to multiple interpretations, the facility should check with the
doctor to determine what tests he or she wanted performed before
submitting a claim for reimbursement to Medicare. Thus, if the
laboratory performed a test that the doctor did not order, the
laboratory will not erroneously bill for that test. Similarly, if a
laboratory cannot perform an ordered test due to, for example, a
laboratory accident or insufficient quantities of specimen, the
laboratory should not submit a claim to Medicare. The OIG considers the
submission of a claim for tests that were either not ordered or were
not performed to be a potential false claim.
d. Billing of Automated Multichannel Chemistry Tests: Laboratory
compliance policies should ensure that the laboratory bills Medicare
appropriately for automated multichannel chemistry tests. All tests
appearing on HCFA's most recent list of automated multichannel
chemistry tests should be billed using the appropriate CPT (80002-
80019) or HCPCS (G0058-G0060) codes. Tests appearing on this list
should not be billed individually unless only one such analyte test is
ordered and performed.
e. Billing of Calculations: Since the OIG views compliance programs
as a check and balance system to reduce error and improve quality,
laboratory compliance policies should ensure that the laboratory does
not bill for both calculations (e.g., calculated LDLs, T7s, indices, to
name only a few) and the tests that are performed to derive such
calculations. In many situations, physicians are not offered a choice
about whether to receive such calculations, nor are they aware of the
practice of some laboratories to bill Medicare for such calculations in
addition to the underlying tests, as the physicians themselves are only
billed for the underlying tests. At the current time, the OIG views
billing for both the calculations and the underlying tests to be double
billing which may subject a laboratory to criminal or civil penalties.
4. Reliance on Standing Orders
Although standing orders are not prohibited in connection with an
extended course of treatment, too often in the past they have led to
fraudulent and abusive practices. Laboratories must be vigilant about
this and take appropriate steps to prevent abuse. Thus, while
laboratory compliance plans can permit the use of standing orders
executed in connection with an extended course of treatment, the
compliance plan should require the laboratory to monitor existing
standing orders to ensure their continuing validity. We suggest that,
consistent with State law requirements, a laboratory should contact all
nursing homes from which the laboratory has received such standing
orders and request that they confirm in writing the validity of all
current standing orders. In addition, in accordance with State law,
laboratories should verify standing orders relied upon at draw stations
with the physician, physician's office staff, or such other persons
authorized by law to order tests who have provided the standing orders
to the laboratory. With respect to End Stage Renal Disease (ESRD)
patients, at least once annually, laboratories should contact each ESRD
facility or unit to request confirmation in writing of the continued
validity of all existing standing orders.
5. Compliance with Applicable HHS OIG Fraud Alerts
The HHS OIG periodically issues fraud alerts setting forth
activities believed to raise legal and enforcement issues. 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. Moreover, the compliance plans
should require that a laboratory cease and correct any conduct
criticized in such a fraud alert, if applicable to laboratories, and
take reasonable action to prevent such conduct from recurring in the
future. If appropriate, a laboratory should take the steps described in
Section G regarding investigations, reporting and correction of
identified problems.
6. Marketing
Laboratory compliance plans should require honest, straightforward,
fully informative and non-deceptive marketing. It is in the best
interests of patients, physicians, laboratories and Medicare alike that
physicians fully understand the services offered by the laboratory, the
services that will be provided when tests are ordered, and the
financial consequences for Medicare, as well as other payers, for the
tests ordered. Accordingly, laboratories that market their services
should ensure that their marketing information is clear, correct, non-
deceptive and fully informative.
7. Prices Charged Physicians for Profiles
Laboratories are paid for their services by a variety of payers in
addition to Medicare and other federally funded health care programs.
Such payers often include health insurers, other health care providers,
and physicians. 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. Such
compliance policies should ensure that as tests are included in or
added to profiles, the price for the enhanced profile increases and the
overall price for the profile is never below cost. Laboratories that do
not increase the price to a doctor for an enhanced profile or that
charge below cost for an enhanced profile and then bill Medicare or
another federally funded health care program the full third-party price
for the profile components will be risking false claims and kickback
enforcement actions.
8. Retention of Records
Compliance programs should ensure that all records required either
by Federal or State law or by the compliance plan are created and
maintained. One of the best ways to confirm that a compliance plan is
effective is through reports that reflect results. The creation of such
documents will reach this goal, but it may also raise a variety of
legal issues, such as patient privacy and confidentiality. These issues
are best discussed with legal counsel.
9. Compliance As An Element of a Performance Plan
To ensure that corporate integrity rises to the level of importance
required of laboratories participating in Medicare
[[Page 9439]]
or other federally funded health care programs, compliance programs
should require that the promotion of and adherence to compliance be an
element in evaluating the performance of managers and supervisors.
They, along with other employees, should be periodically trained in new
compliance policies and procedures. In addition, all managers and
supervisors involved in the sale, marketing, or billing of laboratory
services, and those who oversee phlebotomists should: (1) Discuss with
all supervised employees the compliance policies and legal requirements
applicable to their function; (2) inform all supervised personnel that
strict compliance with these policies and requirements is a condition
of employment; and (3) disclose to all supervised personnel that the
laboratory will take disciplinary action up to and including
termination for violation of these policies or requirements. In
addition to making performance of these duties an element in
evaluations, the compliance officer or laboratory management may also
choose to include in the laboratory's compliance plan a policy that
managers and supervisors may be sanctioned for failure to adequately
instruct their subordinates or for failing to detect non-compliance
with applicable policies and legal requirements, where reasonable
diligence on the part of the manager or supervisor would have led to
the discovery of any problems or violations and given the laboratory
the opportunity to correct them earlier.
B. Designation of a Compliance Officer (or Equivalent)
Every laboratory compliance plan should require the designation of
a chief compliance officer or an equivalent (e.g., committee). This
individual should be responsible for developing compliance policies and
standards, overseeing and monitoring the company's compliance
activities, and achieving and maintaining compliance. The individual
should be delegated sufficient authority by the Board of Directors (or
other governing body) to undertake and comply with these
responsibilities and should have open access to senior management and
the governing body. Further, the chief compliance officer should
develop and distribute to appropriate individuals all written
compliance policies and procedures. These policies and procedures
should be readily understandable by all employees (e.g., translated
into other languages, if necessary) and at a minimum, should address
the issues discussed herein.
C. Education and Training
Laboratory compliance programs should require compliance and ethics
training for all employees, especially personnel involved in billing,
sales, marketing and specimen collection and/or test ordering. Such
training should emphasize the company's commitment to compliance with
all laws, regulations and guidelines of Federal and State programs.
Training should be conducted at least annually and repeated at
regularly scheduled times, using a variety of teaching methods and
where appropriate, languages to ensure that all employees fully
comprehend the implications of failing to comply with the laboratory's
compliance plan and all applicable health care program requirements.
The training and education program should cover the laboratory's
compliance policies and should reinforce the fact that strict
compliance with the law and laboratory policies is a condition of
employment. Employees should be informed that failure to comply may
result in disciplinary action, including termination. Training of sales
and marketing personnel should highlight the prohibition against
offering remuneration in return for referrals, and the fact that the
laboratory will take appropriate disciplinary action up to and
including termination for violations of the laws or failure to report a
potential violation by another employee, supervisor or outside
contractor or provider.
In addition to compliance and ethics training, we believe that
laboratory compliance plans also should address the need for periodic
continuing education, which may be required by law or regulation for
certain laboratory personnel, such as phlebotomists and laboratory
technicians. Continuing education programs of this type will help
ensure a knowledgeable and more productive staff.
Laboratory compliance programs should leave no doubt in the minds
of employees and others who are associated with the provider about the
company's commitment to compliance with all laws, regulations and
guidelines governing federally funded health care programs. Compliance
should be one of the company's most important priorities. In addition
to the compliance and ethics training and continuing education
programs, a simple way to re-emphasize this message is to post in
common work areas and other prominent places accessible to all
employees a notice clearly reminding employees of the laboratory's
commitment to compliance with all laws and regulations.
D. Communication
1. Access to the Compliance Officer
An open line of communication between the compliance officer and
his or her staff is critical to the successful implementation and
operation of a compliance program. If fraud and abuse is going to be
reduced, there should be an open door, complete anonymity, non-
retribution policy available to all employees to encourage
communication. Working with or through the legal department can clarify
the gray areas of interpretation of Medicare and Medicaid guidelines
and regulations, but in all cases, the laboratory should encourage
employees not to guess, but to ask if there is confusion or a question.
Where appropriate, awards for reporting violations should be available.
2. Hotline
There are many vehicles for developing a line of communication
between the employee and the compliance office. Hotlines, e-mails, and
written memoranda are examples of just a few. We suggest that
laboratories make available to all employees a hotline telephone number
which can be used to anonymously report suspected misconduct.
Laboratories using a hotline should post in common work areas notices
describing the hotline and providing the telephone number. Matters
reported through the hotline that suggest violations of compliance
policies or legal requirements should be investigated immediately to
determine their veracity.
E. Auditing and Monitoring
The OIG will be critical of compliance plans and programs that
exist on paper but are not earnestly implemented or enforced. In
addition to education and training programs, policies, and notices, a
successful compliance program should require the thorough monitoring of
its implementation and regular reporting to senior executives and
members of the Board of Directors. Although many monitoring techniques
are available, an effective tool to ensure enforcement is the
performance of regular, periodic audits of the laboratory's operations,
with particular attention paid to billing, sales, marketing, notices
and disclosures to physicians, requisition forms, pricing, and
activities of phlebotomists and others involved in the ordering of
laboratory services. Such audits should be designed and implemented to
ensure compliance with the laboratory's
[[Page 9440]]
compliance policies, the laboratory's compliance plan, and all
applicable Federal and State laws. In addition, auditing should address
issues related to contracts, competitive practices, marketing
materials, CPT/HCPCS coding and billing, test information, reporting
and record keeping.
Quality assurance and zero tolerance of fraud and abuse should be
the goal of the compliance division, and we believe that auditing is a
good tool to use to reach that goal. Compliance audits should be
conducted in accordance with pre-established comprehensive audit
procedures and should include, at a minimum: (1) On-site visits; (2)
interviews with personnel involved in management, operations, billing,
sales, marketing, and other related activities; (3) reviews of written
materials and documentation used by the laboratory; and (4) trend
analysis studies. Formal audit reports should be prepared and submitted
to the chief compliance officer and the Board of Directors or other
governing body to ensure that laboratory management is aware of the
results and can take whatever steps necessary to correct past problems
and deter them from recurring. We suggest that the audit or other
analytical reports specifically identify areas where corrective actions
are needed. In certain cases, subsequent audits or studies would be
advisable to ensure that the recommended corrective actions have been
implemented and are successful.
F. Disciplinary Actions
A viable compliance program must include the initiation of
corrective and/or disciplinary action against individuals who have
failed to comply with the laboratory's compliance policies and/or
Federal or State laws or who have otherwise engaged in wrongdoing that
has the potential of impairing the laboratory's status as a reliable,
honest, trustworthy provider. The compliance program should include a
written policy statement setting forth the degrees of disciplinary
actions that can be imposed upon employees for failing to comply with
the company's code of conduct, company policies, and the law. Employees
must be advised and convinced that disciplinary action will be taken,
and punishments enforced, for a discipline policy to have the required
deterrent effect.
G. Corrective Action
1. Investigating, Reporting and Correcting Identified Problems
a. Investigation: Violations of a laboratory's compliance program,
failures to comply with Federal and/or State law, and other types of
misconduct threaten a laboratory's status as a reliable, honest and
trustworthy provider capable of participating in federally funded
health care programs. Consequently, laboratory compliance programs
should require that when the chief compliance officer or others
involved in management of a laboratory learn of potential violations or
misconduct, they promptly investigate the matter to determine whether a
material violation has in fact occurred, so that if a violation has
occurred, management can take steps to rectify it, report it to the
government if necessary, and make any appropriate payments to the
government. Depending on the nature of the allegations, the
investigation into allegations of wrongdoing or misconduct will
probably include interviews and review of relevant documents, such as
submitted claims, test requisition forms, and laboratory test reports.
Some laboratories may wish to engage outside auditors or counsel to
assist them with the investigation.
If an investigation of an alleged violation is undertaken and the
compliance officer believes the integrity of the investigation may be
at stake because of the presence of employees under investigation, the
employee(s) allegedly involved in the misconduct probably should be
removed from his/her current work activity until the investigation is
completed. In addition, the laboratory should take steps to prevent the
destruction of documents or other evidence relevant to the
investigation. Once an investigation is completed, if disciplinary
action is warranted, it should be immediate and imposed in accordance
with the company's written standards of disciplinary action.
b. Reporting: If management receives credible evidence of
misconduct from any source and, after appropriate investigative
inquiry, has reasonable grounds to believe that the misconduct either:
(a) Violates criminal law, or (b) constitutes a material violation of
the civil law, rules and regulations governing federally funded health
care programs, then the laboratory should report the existence of the
misconduct to the OIG as soon as possible. The OIG recommends that the
laboratory give notice to the OIG of this type of misconduct within
sixty (60) days after receipt of the credible evidence of misconduct.
Such prompt reporting will demonstrate the laboratory's good faith and
willingness to work with the government to correct and remedy the
problem.
When reporting misconduct to the government, a laboratory should
give the OIG any evidence relating to the misconduct that the
laboratory has, including evidence disclosed to the laboratory from
another source. The laboratory then should continue to investigate the
reported violation, and once finished, should notify DOJ and the OIG of
the outcome of the investigation, including a description of the effect
of the misconduct on the operation of federally funded health care
programs or their beneficiaries. If the investigation ultimately
reveals that criminal activity may have occurred, the appropriate State
or Federal authorities should be notified immediately. As discussed
below, the laboratory should also take appropriate corrective action,
including prompt restitution of any damages to the government and the
imposition of appropriate disciplinary action.
c. Corrective Action: If the investigation reveals that misconduct
did occur, corrective actions should be immediately initiated. For
instance, if the investigation reveals that the laboratory has received
overpayments, the laboratory should make prompt restitution of such
sums to the appropriate federally funded health care program. Failure
to repay the overpayment immediately could be interpreted as an
intentional attempt to hide the overpayment from the government. For
that reason, laboratory compliance programs and written policies and
procedures should emphasize that monies to which the laboratory had no
legal entitlement in the first place may not be legally retained and
must be returned immediately. In addition to making prompt restitution
and taking corrective action, the laboratory should take whatever
disciplinary action is necessary to cure the problems identified by the
investigation and prevent it from happening again.
2. Non-Employment or Retention of Sanctioned Individuals
Compliance programs should prohibit the employment of individuals
who have been convicted of a criminal offense related to health care or
who are listed by a Federal agency as debarred, excluded or otherwise
ineligible for participation in federally funded health care programs.
In addition, until resolution of such criminal charges or proposed
debarment or exclusion, individuals who are charged with criminal
offenses related to health care or proposed for exclusion or debarment
should be removed from direct responsibility for or involvement in any
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federally funded health care program. If resolution results in
conviction, debarment or exclusion of the individual, the laboratory
should terminate its employment of that individual or company.
Conclusion
These basic recommended elements coupled with other published
regulations and guidelines are the foundation for a comprehensive
compliance plan for clinical laboratories. On advice from in-house
counsel and senior management, clinical laboratories should add to or
modify these elements to better reflect the corporate structure of the
laboratory, its mission, and its employee composition. The OIG believes
that by implementing an effective compliance plan, a laboratory will
achieve better quality control of claims submission and reduce the risk
of future criminal and civil liabilities.
Dated: February 24, 1997.
June Gibbs Brown,
Inspector General.
[FR Doc. 97-5192 Filed 2-28-97; 8:45 am]
BILLING CODE 4150-04-P