In response to continuing requests by clients and readers of THE DARK REPORT, this issue institutes a new feature titled “Lab Fraud Watch.” It will provide information about activities in the medical laboratory testing marketplace which could be interpreted as violating federal and state fraud and abuse laws.
It is the belief of many lab executives and pathologists that, in the absence of more aggressive enforcement and regulatory guidance by federal and state agencies, the incidence of non-compliant marketing practices and financial arrangements seen in the lab marketplace has become more common in recent years.
Clients and readers regularly tell us that they would like more “market intelligence” about the types of schemes used by some lab firms to skirt both the letter and the intent of laws governing fraud and abuse. It should be recognized that any description of these practices generally come to us as second-hand information. For that reason, important facts may be unknown which would be material in deciding whether the alleged practice would be in violation of federal and state laws.
IN THE NORTHEAST, IT WAS REPORTED TO US that a urology group which operates an in-clinic anatomic pathology laboratory has begun handling selected tissue biopsies in the following ways. First, after harvesting certain biopsy specimens, it then cuts them in half. Each half goes into a separate specimen container and is then sent to the urology group’s in-practice histology laboratory.
There, each biopsy specimen is tested. Our source assumes that the urology practice then bills the payer for each technical component service and each professional component service on the two halves of what would typically be handled as a single biopsy specimen by most pathology laboratories.
DNA Testing for Patient ID
What adds interest to this situation is another procedure which is done by this urology group. At the time the biopsy specimens are collected from the patient, a buccal swab is also collected. The purpose of this buccal swab is to establish positive patient identification of the tissue specimen and the slides when handled by the histology laboratory and the pathologist(s). The urology group’s anatomic pathology laboratory will run the DNA from the buccal swab and similarly test the DNA of the patient’s biopsy tissue to verify a match.
Our source tells us that the urology group then bills the payers for the DNA testing and payers will reimburse these DNA tests as part of patient safety and positive patient ID practices. As represented above, the practice of dividing a single biopsy specimen into two specimen containers, if done only to maximize payer reimbursement, would violate certain state and federal laws.