Category Archives: Toxicology Labs

Standing Orders in Drug Treatment Programs: How to Avoid Waving a Red Flag

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so 2014By: Karina P. Gonzalez

Medical necessity is the driving force for the payment of any service, but is especially worth noting when discussing laboratory testing. Standing Orders for urine drug testing in residential treatment settings are not prohibited, per se, but this practice must be built upon detailed policies and procedures that are precisely followed and are directed to individual patient needs.

The following conditions may help to determine whether Standing Orders are appropriate in a residential treatment setting: Continue reading →

OIG Special Fraud Alert: Laboratory Payments to Referring Physicians

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OIG crestThe Office of Inspector General of the Department of Health and Human Services today issued a Special Fraud Alert pertaining to relationships between laboratories and referring physicians.  Payments from labs to physicians who refer were targeted in the Alert.  The Alert also reiterates their suspicion of so-called “carve out” compensation relationships where state and federal healthcare program dollars are removed from the payment formula (which was previously addressed last year in Advisory Opinion 13-03).  While the Alert does not add anything new to the government’s view of such relationships, it does underscore the very suspect view the OIG has of payment relationships between labs and the physicians who refer to them.  Careful compliance with the Personal Services and Management Contracts Safe Harbor continues to be a core concern.

Point of Care Test Cups Held to be a Prohibited Benefit to Physicians Who Could Not Otherwise Bill for Them

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pee in a cupBy: Jackie Bain

When a physician cannot bill for test results, and a company offers to give that physician those test results for free, a Florida Federal Court has ruled that the company is offering the physician prohibited remuneration.  On May 5, 2014 the Middle District of Florida granted partial summary judgment on the latest motion in a contentious litigation between Ameritox Ltd. and Millennium Laboratories, Inc.  Ameritox and Millennium are competitors and clinical laboratories that screen urine specimens for the presence of drugs.

Millennium provided free point of care testing cups to physicians, who use the cups for initial testing and then return the cups back to Millennium for confirmation tests.  Physicians do not bill patients or insurance companies for the point of care tests. Continue reading →

When is Marketing An Illegal Kickback?

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kickbackHealthcare professionals and businesses are routinely barraged with people who claim to be able to generate business for them.  The business of healthcare is like none other in its abhorrence of anything that even smells like payment for patient referrals, so professionals and businesses alike have to be extremely cautious and well advised in crafting marketing and related business-enhancing relationships.

The federal Anti Kickback Statute (“AKS”) is a criminal law that arises in the context of individuals and entities that pay or receive anything of value in exchange for referring a patient whose care is compensated in any way by a state or federal healthcare program.  Violations of the statute are punishable by a maximum fine of $25,000 and/or imprisonment up to five years.  Federal courts have applied the statute to any arrangement where even one purpose of the arrangement was to obtain money for the referral of services or an attempt to induce additional referrals. Its exceptions (“Safe Harbors”) include permissible arrangements for independent contractors and employees, both of which are elusive because of the common requirement that the arrangement not vary based on the value or volume of business between the parties.  The “value or volume” aspect of the regulations flies in the face of percentage based compensation arrangements (which seem to be the rule in marketing relationships). Continue reading →

Toxicology Labs Owned by Referral Sources – Is it Really so Wrong?

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By: David Hirshfeld & Jeff Cohen

Lately we’ve noticed an uptick in criticism of toxicology labs that are owned by the substance abuse treatment programs and recovery residences that refer to them.  Sadly, this criticism seems to be coming from within the addiction and recovery industry itself.  In addition to being absolutely necessary for substance abuse treatment, toxicology screens have become a meaningful source of revenue that helps to fund treatment programs and scholarships for those who cannot afford to pay the full cost of treatment.  We cannot understand why the substance abuse treatment industry would want to help pull the rug out from under itself, but that seems to be what is occurring.  Under the current state of Florida law, toxicology labs can be owned by their referral sources without much risk if that arrangement is properly structured. Continue reading →

Florida Recovery Residences Caught in a Perfect Storm

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sober home keyBy: David Hirshfeld

A confluence of forces brought about by lawmakers, insurance companies and regulators have caught recovery residences in the eye of a perfect storm here in Florida. Senate Bill 582 proposes to mandate that Florida sober homes and their owners be registered, inspected and licensed; but really, that bill may not be necessary due to other factors.  Florida’s Department of Children and Families (“DCF”) has been using Section 65D-30.007 of its Administrative Code to require that sober homes be licensed for Residential Treatment if any resident at that sober home is also a patient at a licensed treatment program owned by the same person or entity that owns the sober home.

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Florida Clinical Labs Must Now Give Patients Direct Access to Their Laboratory Test Results

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lab testingBy: David Hirshfeld 

In an effort to help individuals access their health information so that they can become more actively involved in managing their own health care, several agencies within the Department of Health and Human Services promulgated a rule that modifies the Clinical Laboratory Improvement Amendments (“CLIA”) and the Health Insurance Portability and Accountability Act (“HIPAA”) in a way that supersedes Florida State laws governing the disclosure of laboratory test results directly to patients.

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Integrating Clinical Labs Into Substance Abuse Treatment Programs: A Whole Lot of Fuss Over Pee in a Cup

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pee in a cupBy: David Hirshfeld

The recent and drastic cut in reimbursement for point-of-care urinalysis has caused just about all of our substance use treatment program clients to consider integrating clinical laboratories into their enterprise models.  These programs long for a way to restore the revenue stream that urinalysis had generated.  For sober living programs, the lost revenue often means the difference between profitability and breaking even.  For more comprehensive programs, the lost revenue can hinder their ability to expand or provide scholarships to those who could not otherwise afford treatment.  Regardless of their specific goals, our clients are amazed and dismayed at the regulatory minefield that awaits them; especially since their lab consultant (read “reagent salesperson”) makes the process sound so simple. Continue reading →

Blue Cross Lawsuit Against Avee Attacks Point of Care Testing

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bcbs lawsuitA recent lawsuit by Horizon Blue Cross/Blue Shield of New Jersey has the potential to cripple point of care testing arrangements often employed by drug and alcohol treatment centers.  At risk is not only the roughly $36 Million sought to be recouped by BC/BS, but also perhaps the many millions more which may be claimed by other payers as well.

BC/BS is making serious allegations against Avee Laboratories, Alere, Inc., and a number of recovery centers.  The factual allegations include: Continue reading →

Drug & Alcohol Treatment Facilities Need to Focus on Licensure

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Many drug and alcohol treatment facilities see continuity of care and income opportunities in providing qualitative (and even quantitative) toxicology screening to make sure they know (1) what their residents/patients are taking, and (2) in what quantities.  Facilities need to make sure they know that federal and state law will view them as a clinical lab, even when they are simply taking urine and using cups.  CLIA will require they obtain “waived” status (since dipsticks are in that category).  Facilities also need to examine whether state licensure (as a “Healthcare Clinic”) is also required.  Chapter 400, Florida Statutes requires any entity to obtain a healthcare clinic license if (a) healthcare services are provided, and (b) claims for those services are submitted.  Even though most facilities are out of network, most do submit claims to insurance carriers and hence implicate the state healthcare clinic license law (which is different from the CLIA law).

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