New OIG Report Confirms that Labs Are Still on the Enforcement Radar

After a recent dip, OIG enforcement activity has seemingly rebounded, at least in terms of total recoveries. That’s the basic punchline from the newly published OIG Semiannual Report to Congress (covering Oct. 1, 2018 through March 31, 2019). The other key takeaway is that while they are no longer the main focus of OIG enforcement activity, labs are still very much on the agency’s radar. Here’s what lab managers need to know about the report.

Enforcement Activities

Year over year, enforcement activities were basically flat. The one notable exception was the 57% increase in total recoveries, $2.3 billion vs. $1.46 billion in the corresponding period last year.

 

Payments for Unnecessary Tests

As usual, labs figured prominently in initiatives targeting improper Medicare and Medicaid payments during the period. The Report cites the example of a case in California involving GenomeDx Biosciences, which entered in to a settlement agreement to resolve allegations that it improperly billed Medicare for genetic testing services from Sept. 1, 2015 through June 30, 2017. Specifically, the United States alleged that GenomeDx submitted claims for Decipher Prostate tests (its flagship service) that were not medically necessary. GenomeDx agreed to pay more than $1.9 million to resolve its alleged liability.

 

Kickbacks

Labs also come up in the OIG discussion of affirmative litigation cases under the Civil Monetary Penalties Law, namely the crackdown against physicians on the receiving end of the Millennium Laboratories kickback scheme. Explanation: In 2015, Millennium agreed to pay $256 million to settle claims of providing free point of care urine drug testing cups (POCT cups) to physicians in exchange for test referrals. In September 2017, the case entered a new phase when enforcers began targeting the downstream physicians who accepted the free cups. To date, OIG-initiated affirmative litigation actions against the physicians and practices has yielded over $2 million in total recoveries.

 

Takeaways

For lab managers, this year’s report suggests:

• Federal enforcement activity remains consistent;
• Emphasis is on maximizing recovery efforts in terms of financial payoff;
• Individuals and small companies are still targets, especially when criminal activity also involves larger entities;
• The opioid crisis continues to get attention; but where labs were once a target, the focus now is largely on prescription drugs abuse and prevention; and
• Labs remain on OIG’s enforcement radar.

**************

This article originally appeared in G2 Intelligence, National Intelligence Report, July 2019