The tragedy of the COVID-19 pandemic is something we all agree we wish we could have avoided. However, the fact of the matter is that many respiratory and clinical labs have seen a boon to their bottom line due to the significant increase in lab tests brought about by widespread testing for COVID-19. For example, in March 2021, labs had processed more than 363 million COVID tests, which averages out to about 1.1 tests per U.S. citizen. This number is rapidly growing as, each day, labs process more than one million COVID tests.
That said, initially, COVID testing got off to a slow start. The result was that the federal government did little to regulate respiratory and clinical labs in the processing of samples for fear of standing in the way of getting the disease under control. However, now that a vaccine is available, much of the country is vaccinated, and the disease (at least temporarily) appears to be under control, the federal government is cracking down on respiratory and clinical labs performing COVID-19 testing.
By some estimates, upwards of 80% of all COVID tests are processed by private labs. Clinical labs face complex regulatory requirements when ensuring they comply with current federal laws, especially in the wake of the pandemic. Thus, it is essential that respiratory and clinical labs performing COVID testing ensure that their procedures and policies are compliant with the current regulatory framework.
Oversight of Respiratory and Clinical Labs Performing COVID-19 Testing
Due to the rapid spread of COVID-19 and the unprecedented burden placed on the healthcare system, the federal government initially promised free COVID testing for anyone who exhibited symptoms. If a patient had private insurance, the insurance company would chip in for at least some of the cost; however, much of the financial burden of COVID-19 testing fell on the federal government.
The Health and Human Services Office of Inspector General (HHS-OIG) is one of the federal enforcement agencies tasked with enforcing laboratory compliance. The HHS-OIG is the largest inspector general’s office in the federal government, with more than 1,600 investigators, attorneys, and support staff. While the HHS-OIG investigates healthcare fraud across all government-funded programs, these days, it puts significant effort into uncovering labs that process unauthorized, excessive, or improperly billed COVID-19 tests.
Common Problems Facing Respiratory and Clinical Laboratories in the Wake of COVID
Labs face a number of challenges when seeking to comply with the current regulatory framework for the administration and processing of COVID-19 tests. One of the HHS-OIG’s primary concerns is labs performing far too many tests per patient. In the federal government’s eyes, labs may be using the COVID-19 pandemic to pad their bottom line, knowing that the regulatory environment eased up during the pandemic.
Of course, given the situation, many labs were merely trying to do everything they could to get test results in as many people’s hands as possible. Indeed, this was—and continues to be—one of the primary ways to reduce the spread of the disease.
Labs processing increasingly high volumes of samples may also have challenges when it comes to:
- Obtaining correct validation forms;
- Properly documenting clinical necessity; and
- Validating doctors’ orders.
One of the issues is that the regulatory environment temporarily eased but is now tightening back up. And once the HHS-OIG notices a potential issue with a lab’s practices, it may sense the problem is only the tip of the iceberg and may begin digging deeper into the lab’s procedures and billing practices. This raised the importance of OIG compliance for all respiratory and clinical labs.
What Is OIG Compliance?
An OIG compliance program is a set of written practices implemented by a laboratory designed to identify areas of potential compliance risk, monitor new areas of concern, and address possible regulatory violations when they arise. The purpose of a compliance program is two-fold. First, having a compliance program on the books educates employees and other stakeholders, helping to prevent violations in the first place. Second, a comprehensive compliance strategy can help shield a lab from administrative, civil or criminal penalties in the event federal authorities uncover violations. This is because law enforcement considers the development and adherence to a compliance program as a mitigating factor when determining whether to take enforcement action.
The Seven Elements of an Effective OIG Compliance Program for Respiratory and Clinical Labs
The HHS-OIG is interested primarily in ensuring compliance, not pursuing sanctions. Thus, the HHS-OIG provides guidance to labs in how they should craft their compliance programs. According to the most recently issued OIG guidance, a respiratory or clinical lab should ensure that any compliance program contains the following elements:
- Implements written policies, procedures and standards of conduct;
- Designates a compliance officer and compliance committee;
- Conducts effective training and education;
- Creates open lines of communication with the compliance committee;
- Enforces compliance standards through well-publicized disciplinary guidelines;
- Conducts internal and external monitory through periodic audits; and
- Responds promptly to correct any possible violations.
It is important to keep in mind that the HHS-OIG expects more than a “paper” policy. This means that the HHS-OIG will not only review a lab’s compliance program to ensure that it adequately addresses the lab’s specific compliance risks but also to ensure that it conveys management’s commitment to remaining in compliance. Labs should also periodically review their existing compliance programs to ensure they continue to meet the current regulatory framework.
As federal healthcare defense attorney Dr. Nick Oberheiden explains,
The COVID-19 pandemic brought about significant changes to many healthcare businesses. When it comes to respiratory and clinical labs, in particular, the pandemic resulted in a sudden and unexpected increase in testing. While the regulatory landscape in which these labs operate was temporarily relaxed in 2020, federal authorities are now starting to crack down on unauthorized testing and non-compliant billing and coding practices. Thus, even well-meaning labs can easily run afoul of the complex regulatory requirements they face. It is essential these labs have a comprehensive OIG compliance program on the books to avoid unnecessary exposure to administrative sanctions or other types of liability.
The HHS-OIG is making up for lost time now that the COVID-19 pandemic appears to be under control. Respiratory and clinical labs should immediately review their OIG compliance programs in the event that the HHS-OIG comes knocking. Compliance programs are not created equal, and each lab must devise a program that is catered to the unique compliance risks it faces.
