CEO SUMMARY: It’s a first in the lab industry. In recent weeks, THE DARK REPORT asked the nation’s leading attorneys in clinical lab and anatomic pathology law to identify the most important legal, compliance and managed care issues for 2011 and 2012. Using a consensus methodology, this survey produced a prioritized list of six key action items. Several are brand new developments—such as Medicare’s RAC program and the approaching era of Accountable Care Organizations (ACO). But some are familiar, such as lab test sales/marketing concerns.
FOR 2011, LABORATORIES FACE NEW LEGAL AND COMPLIANCE ISSUES. That’s one important finding from an unprecedented survey of the top lawyers who serve the lab testing industry.
Familiar with the term “RAC?” You should be, as this panel of esteemed attorneys put this at the top of the list of six high priority legal and compliance issues for the laboratory testing industry. RAC stands for the Medicare Recovery Audit Contractor (RAC) program.
Private contactors authorized by the Centers for Medicare and Medicaid Services (CMS) can show up at hospitals, physician offices, clinical laboratories, and other healthcare providers to conduct an audit of that provider’s Medicare claims. The RAC auditor is looking for improper Medicare payments—both overpayments and underpayments. The RAC auditor will be paid on a contingency fee basis, receiving a percentage of the improper overpayments and underpayments it collects from the providers it audits.
The concept behind THE DARK REPORT’S survey of high priority legal and compliance issues is simple. First, approach the eight to 10 attorneys recognized for their active and ongoing involvement in clinical laboratory and anatomic pathology matters.
Second, ask them a simple question: “For 2011 and 2012, what are the five legal, compliance, and managed care issues that you consider require full attention and action by all clinical labs and pathology groups? Third, compile these responses and develop a consensus ranking of the most important compliance, legal, and managed care concerns now pressing the laboratory testing profession.
As a fourth step, THE DARK REPORT is Industry’s Top Legal, Compliance, and Managed Care Issues for 2011-2012. In this report, the attorneys who participated in the survey are providing detailed insight and analysis for each of the six high-priority legal and compliance matters.
Labs Should Take Action
The six top issues are presented in the sidebar at right. The attorneys who participated in this survey are listed at the bot- tom of the same sidebar. In the intelligence briefing that follows on pages 5-8, these six attorneys who participated in the survey comment on why laboratories should be aware of these issues, and how labs should develop a strategy to ensure they are compliant and prepared.
The method of conducting a survey and producing a rank order from the consensus opinions of leading legal experts in laboratory law and compliance is a proven way to accurately identify important issues. In turn, laboratory executives and pathologists can use this rank order list of legal, compliance, and managed care matters to establish their own priorities for action by their laboratories.
Thus, although relatively short at six key issues, this list brings focus to several new developments. RAC audits are one of those, as is the pending implementation of Accountable Care Organizations (ACO) on January 1, 2012 (when Medicare is to begin contracting with ACOs).
The legal and compliance issues associated with physician adoption and use of electronic health record (EHR) systems is identified by our survey panel of attorneys as another high priority issue. Similarly, the unfolding changes in how payers cover and reimburse for molecular tests is also prominent on this list.
It is notable that issues associated with the sales and marketing of laboratory tests was a consensus pick by this panel of attorneys. It demonstrates that, within their individual legal practices, their laboratory clients regularly deal with matters that may possibly include inducement and Medicare anti-kickback violations.
National Attorneys Identify Key Issues
IN THE LAB TESTING INDUSTRY’S FIRST-EVER SURVEY OF PROMINENT ATTORNEYS compliance, and managed care issues were identified as the most important for 2011 and 2012. These issues are:
2011-2012’s Top Legal Issues
(Ranked by priority)
- RAC Audits
- EHR Incentives and Compliance
- Molecular Test Coverage and Reimbursement
- Accountable Care Organizations
- Lab Test Sales and Marketing Compliance
- Laboratory-Developed Tests (LDT)
In alphabetical order, these well-known lab industry attorneys participated in THE DARK REPORT’S 2011 Lab Legal and Compliance Survey:
- Richard S. Cooper McDonald Hopkins, Cleveland, Ohio
- Hope S. Foster Mintz Levin, Washington, DC
- Rick L. Hindmand McDonald Hopkins, Chicago, Illinois
- Patric Hooper Hooper, Lundy & Bookman, Los Angeles, California
- Peter M. Kazon Alston & Bird, Washington, DC
- Jane Pine Wood McDonald Hopkins, Cleveland, Ohio