| What is a voluntary compliance program? A voluntary compliance program is created by a laboratory based on the OIG's published guidance.It will reduce or eliminate improper billings to Medicare and prevent criminal activities within its company.If a laboratory develops and implements an effective compliance program, it will receive special consideration should a problem arise involving a government investigation. | View Page |
| Element 5 Element 5:
Every employee must understand that the standards, policies and procedures associated with the compliance program must be adhered to at all times.
Employee will be disciplined up to terminations for violations.
Employee can be disciplined or terminated for failing to report a problem or suspect activity.
All employees are screened prior to being hired for previous actions against them by any law enforcement or government agency regarding any health care prosecution or exclusion from the Medicare or Medicaid program.
Adherence to the compliance program's policies and procedures will be a component of every employees annual evaluation and performance review.
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| Laws and regulations that govern laboratories Social Security Act:
Medicare and Medicaid laws are in this act.
Medicare rules and regulations come under this act.
Antikickback laws:
Provide criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit or receive money or favors for referrals of tests or services that will be paid for by the Medicare or Medicaid programs.
False Claims Act:
Provides criminal penalties for knowingly or willingly filing a false claim to a government program.
Self Referral (Stark) laws and regulations:
Identify financial relationships that have the potential to result in directed referral to one or both of the individuals or entities involved.
Prohibit the referral of patients or tests between related entities unless certain conditions are met.
Health Insurance Portability and Accountability Act (HIPAA)
Prohibits health care providers and payers from improper or inappropriate use of a patient's confidential health information
Requires health care providers to insure that a patient's confidential information is kept secure
Provides for standardized electronic formats for all health care transactions
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| Billing and medical necessity Billing:
Highest risk activity a laboratory has. All laboratory activities contribute to the billing process.
Many of the risk areas included in this program are components of the billing function.
Medical necessity:
Medicare is only allowed, by law, to pay for tests that are reasonable and necessary for the diagnosis and treatment of disease.
Medical necessity is an underlying principle of the Medicare program.
Tests performed for screening or routine exams are not considered medically necessary by the Medicare program.
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| Medical coverage policies (LMRPs) LMRPs (Local Medical Review Policies) are published by Medicare for some laboratory tests.
Developed for tests that can be used for screening or diagnosis of disease.
CPT codes describe laboratory tests and ICD-9CM codes determine when coverage is allowed.
If an LMRP test is ordered by a physician, an ICD-9CM code that is included in the LMRP must be given to the laboratory or the Medicare program will not pay for the test.
It is against the law for laboratory to change or add an ICD-9 code submitted by a physician.
The Balanced Budget Act of 1997 made it illegal for physicians to order LMRP tests and not supply an ICD-9CM code with the order.
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| Advance Beneficiary Notices (ABNs) Advance Beneficiary Notices (ABNs) allow laboratories to bill Medicare patients directly for specific tests that are not covered by Medicare.
A laboratory cannot bill a Medicare Beneficiary for a laboratory test unless it notifies the patient in writing that Medicare is not going to pay for the test.
This notice is called an ABN.
The beneficiary can choose not have the test performed if they do not want to pay for it.
Laboratories cannot make all Medicare beneficiaries sign ABNs.
The ABN must contain the specific name of the test.
The ABN must give a specific reason the laboratory thinks payment for the test will be denied.
The beneficiary should sign the ABN and be given a copy.
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| Requisitions and ambiguous orders Requisitions must be designed to ensure that ordering physicians can choose tests that are medically necessary for their patients.
Requisitions should contain reminders about Medicare rules of medical necessity and list the contents of panels and profiles.
Requisitions must provide a place for the physician to include diagnosis (ICD9-CM) codes.
Physicians should be encouraged to use only the requisitions supplied by the laboratory to order tests.
Ambiguous or unclear test orders
When the orders for a test are not absolutely clear, the laboratory must contact the ordering physician to clarify the orders before performing and billing for the test.
The laboratory cannot guess at the order.
The laboratory cannot perform and bill for tests that are not specifically ordered.
The laboratory cannot change a physician order without contacting the physician.
In any case where specimen integrity or patient care will be compromised by a delay in testing follow the policies the laboratory has established for such cases.
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| Written and verbal orders All tests must have a written order on file.
Any verbal orders for tests including tests added on to a specimen already in the lab, must be followed up by a request for a written order.
Employee who receives a verbal or add-on order must follow procedures to ensure that a follow-up written order is requested.
It is against Medicare regulations to bill extra for calculated test results. Only appropriate tests actually performed may be billed.
It is against the law to bill for the same tests or services twice (duplicate billing).
It is against the law to bill for quality control tests or tests performed multiple times to check or verify the results.
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| Panels and profiles Panels and Profiles:
It is not against the law for a laboratory to allow the use of panels, profiles and custom panels.
The laboratory must ensure that the ordering doctor knows what tests are included in a panel or profile and what CPT codes will be billed to the Medicare program.
The laboratory notifies doctors about panels and profiles through a written notice and the requisition.
Employees should not permit the order of any panel or profile not authorized by the laboratory.
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| Physician notices and acknowledgements Notices to physicians must be sent by the laboratory to its customers once each year.
Notices remind physicians about Medicare rules and regulations.
Notices include summaries of laboratory test ordering policies, requisition use, CPT coding and ICD coding.
Physician acknowledgements must be signed by any physician who wants to create a custom panel, profile or reflex test.
This is the only way a special panel or profile may be performed by the laboratory.
The physician must order tests individually when there is no physician acknowledgement signed.
The laboratory must renew physician acknowledgements at least annually.
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| Couriers and referral tests The laboratory's couriers may not transport items except those related to the testing services offered by the laboratory.
Couriers must follow all OSHA standards for the handling and transport of specimens.
The laboratory is responsible for all tests it refers to other laboratories.
Laboratory should not change CPT codes supplied by a reference laboratory without contacting the reference laboratory.
The laboratory is responsible for all tests it bills to Medicare/Medicaid even if the test was performed by a reference laboratory.
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| Utilization and other regulations Laboratories must not induce physicians to order unnecessary tests through their marketing or education activities: They must monitor the use of laboratory services by their clients. They must correct any situation where something they did caused an unnecessary increase in test utilization. Cost Reports Hospitals laboratories must ensure that information used in hospital Medicare cost reports is accurate and includes only those costs which are appropriate. Laboratories must follow all CLIA and OSHA regulations: failure to do so may result in a False Claims Act violation. | View Page |
| Billing Billing is the highest risk area for the laboratory because it generates the claims that are sent to Medicare and other government payers.Payment and payment errors are the focus of the OIG compliance guidance for the laboratory because of the revenue involved.Fraud and abuse is often perpetrated as a billing scheme.Nearly all laboratory functions can affect the billing of laboratory tests. | View Page |
| Medical necessity Medical necessity means that Medicare is not allowed by law to pay for any tests that are not necessary for diagnosis or treatment of disease.A laboratory may not submit a claim to Medicare or other government payers for any test it knows is not medically necessary except in certain cases:
When the patient has signed an advance notice.
When a patient has requested the lab to submit such a claim for a determination by Medicare.
Medicare does not pay for screening tests or tests that are ordered in the absence of signs or symptoms.Billing department employees are responsible to follow all policies and procedures related to the submission of claims to reduce erroneous billings. | View Page |
| Local medical review policies (LMRPs) LMRPs (Local Medical Review Policies) are published by Medicare for some laboratory tests.
They are usually developed for tests that can be used for screening or diagnosis of disease.
LMRPs use CPT codes to identify the tests and ICD-9 codes to determine when coverage is allowed.
If an LMRP test is ordered by a physician, an ICD-9 code that is included in the LMRP must be given to the laboratory or the Medicare program will not pay for the test.
It is against the law for laboratory to change or add an ICD-9 code submitted by a physician.
A laboratory should not submit a claim for an LMRP test that is not accompanied by an acceptable ICD-9 code.
The Balanced Budget Act of 1997 made it illegal for physicians to order LMRP tests and not supply an ICD-9CM code with the order.
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| Advance Beneficiary Notices (ABNs) A Laboratory may not bill a Medicare Beneficiary for a test unless it notifies the patient in writing before the testing is done that Medicare is not going to pay for the test. This notice is called an ABN.
Laboratories cannot make all Medicare beneficiaries sign ABNs.
The ABN must contain the specific name of the test and give a specific reason the laboratory thinks payment for the test will be denied.
The beneficiary should sign the ABN and a copy should be sent to the laboratory and one given to the beneficiary.
The billing department must have evidence that the ABN has been signed before it bills a patient.A laboratory may bill Medicare even though it knows it will not be paid when it has evidence an ABN has been signed.
A modifier (GA) must be added to the CPT code for a test where an ABN has been signed.
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| Test pricing and antitrust It is not against the law for a laboratory to have different fee schedules for different billing situations.Most laboratories have one fee schedule for customers that must be billed individually (patients, insurance, Medicare) and one for customers billed monthly on an invoice type of statement (client or doctor billing).The difference in price between the two schedules should be a reflection of the financial benefits of direct client billing.Test prices should be determined by means of a financial analysis that include such factors as cost, market value and reasonable profit.Contractually arranged pricing that results from negotiations with insurance and managed care companies should at least cover costs of testing.Laboratories may not work together to fix or set prices in the market place. | View Page |
| Equipment and space Laboratories may only lease space from physicians who refer Medicare patients to them under certain circumstances:
There must be a written lease for at least one year.
Lease price must be at "fair market value."
All leases must be reviewed by legal counsel to ensure compliance with antikickback and Stark laws.When leasing or renting equipment to a physician or from a physician the same basic rules apply as for space.If the laboratory is located in a hospital, the relationship between the hospital and a physician who refers to the lab may have antikickback or Stark implications. | View Page |
| Client contracts A laboratory that receives referrals from a nursing home or Skilled Nursing Facility (SNF) should have a written agreement with that facility:
The Agreement should define billing and documentation responsibilities.
The facility should be responsible for determining the payment status of its patients and is liable for submitting incorrect payment information to the laboratory.
Fees should be consistent with other similar customers.
A laboratory that provides services to a Home Health Agency treating Medicare/Medicaid beneficiaries should have a written agreement with that agency:
The Agreement should define billing and documentation responsibilities.
The Agreement should place the responsibility on the Home Health Agency to establish that all patients receiving laboratory services are "homebound" as defined by Medicare.
Fees should be consistent with other similar customers.
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| Case Study 10 The setting is nursing home where a phlebotomist from the laboratory goes to draw blood samples each day. The phlebotomist picks up the requisitions for blood test orders at the nursing station and then goes to the various rooms to draw blood from the patients. She notices that every requisition has an Advanced Beneficiary Notice (ABN) attached to it that is signed by the patient, even when the tests that were ordered don't need them. She asks the nurse at the station but she informs the phlebotomist that she doesn't know anything about it because it is done on the night shift.She lets the phlebotomist know that she will inform the nursing supervisor about it when she arrives at 9:00 AM. The phlebotomist completes her blood draws and returns to the laboratory. What should the phlebotomist do, if anything, in addition to her letting the nurse know about the problem?Correct Answer: The phlebotomist should report the incident to her supervisor upon returning to the laboratory.Discussion: Since the laboratory is submitting the claims for any Medicare patients that the phlebotomist might draw, the problem is the labs problem. However, it is not going to change the fact that the ABNs were already signed by the patients if the phlebotomist refuses to draw them or if the nursing personnel are required to remove them. By contacting the supervisor, an appropriate representative from the laboratory can follow up with the nursing supervisor to ensure they understand the laws and regulations that govern ABNs. | View Page |
| Case Study 8 The setting is a billing office in a laboratory where two or more clerks work together in very close proximity with each other, so that each can easily see what the other is doing. A billing clerk notices that one of his fellow employees is changing or adding codes to requisitions he is processing. This employee is a friend of his and he knows that he really needs the job at the laboratory because he is a single parent raising two kids. He also knows that what the employee is doing is against the company's compliance policies.He asks the employee about it and is given the explanation that because the computer requires something to be entered in the ICD-9 code field and he only does this with non-Medicare patients, it doesn't matter. The employee explains that it saves him a lot of time he uses to call to get codes for the Medicare patients. What should this clerk do about this?Correct Answer: She should talk to the supervisor about the problem even if she talks to the employee about it and the employee says she will talk to the supervisor and stop doing it.Discussion: Every employee who becomes aware of a violation of the law or a compliance policy has a responsibility to take action, which includes reporting the problem to a supervisor or the compliance officer. It doesn't matter that these patients are not Medicare patients, the important thing is that the employee is violating a compliance policy. If this employee does not report the problem he is himself violating a compliance policy. If it is subsequently discovered that he knew and didn't report it, he could be terminated. If there is a need for refunds to be done or other action, it will not occur and could create a big problem for the lab in a subsequent audit or other action. | View Page |
| Case Study 4 Busy hospital laboratory in a 350 bed urban hospital that provides laboratory testing for the hospital and for the hospital's outreach testing laboratory. A medical technologist in the microbiology department receives a call from a friend who works in a laboratory in a physician office. The physician is not a regular client of the laboratory currently but uses another laboratory for most of their work. The microbiologist knows that the sales department would like to get this account. The friend explains to her that she is doing a quality control check on her in-office microbiology testing and her regular laboratory will do it but is going to charge her for it. She asks the microbiologist if she will do it for free since it is quality control, not Medicare and is not going to be billed to anyone.She tells the microbiologist that she would like to use the hospital lab for everything but her doctor insists on using the competitor. She indicates that the favor might help get the doctor to try the hospital laboratory for other tests. The microbiologist should:Correct Answer: Explain to her friend that if the hospital does the tests for no charge on the promise of other referrals, both the physician office and the hospital could be liable for violations of the antikickback statute.Discussion: The antikickback statute is implicated in this scenario because the free testing is solicited on the condition that other referrals may occur as a result of providing the favor. In fact, the solicitation itself is a violation of the law. The fact that Medicare patients are not specifically mentioned in the scenario is not sufficient to remove the risk. The technologist should also report the incident to the Compliance Officer and seek advise about what documentation, if any, should be kept concerning the incident. | View Page |
| Case Study 1 A billing clerk is entering billing demographics on requisitions as a part of the normal days work. The department is under pressure to reduce accounts receivable, which means that the more clean claims that are filed, the better. This particular requisition is for a Medicare patient and has an LMRP test but does not have a diagnosis on it. She remembers that just a few requisitions before this one she had a requisition from the same doctor that had this same test on it that did have a diagnosis that allowed the test to be billed. She thumbs back in the pile and finds the previous requisition, notes the code that was used and adds it to the current requisition. This will help her meet the department goal of getting claims paid and reducing accounts receivable. It is all right for her to do this because:Correct Answer: She should not do this because it is against the law to change diagnosis information on a requisition.Discussion:
A laboratory employee should never change, add or use previously received diagnosis information for the purpose of making a test billable for the Medicare program or for any other insurance or payer. This is a form of fraud and for each claim submitted as a result of this activity the laboratory is liable for a false claim and would have to pay the government back three up to times the reimbursement for the test and up to $10,000 for each claim submitted. Further, if the employee is caught doing this, even if the employee is ignorant of the law and any laboratory policy prohibiting it, she must be disciplined and so should the supervisor. Any employee who notices another employee doing this should correct the employee and report the incident to the department supervisor immediately. | View Page |