On July 18, 2024, the US District Court for the District of Maryland entered default judgments for the United States totaling $26,341,951.38 against multiple laboratory companies and their owner for violations of the False Claims Act.
In its complaint, the United States alleged that the defendant owned and operated multiple corporate entities that sought to profit from the unfolding COVID-19 pandemic by offering COVID-19 tests to nursing homes as a way to bill Medicare for a wide array of medically unnecessary respiratory pathogen panel (RPP) tests. The complaint alleged that these RPP tests were not medically necessary because the beneficiaries had no symptoms of a respiratory illness and because the tests were for uncommon respiratory pathogens.
The complaint also alleged that claims were submitted for RPP tests that were never ordered by physicians and sometimes for RPP tests that were never performed, including over 300 claims that stated that the nasal swab test sample was supposedly collected from the beneficiary on a date after the beneficiary had died.
“The exploitation of federal healthcare programs designed to help the elderly and disabled during a national crisis is absolutely inexcusable,” said US Attorney Erek L. Barron for the District of Maryland. “Regardless of their methods, we will hold accountable those who defraud such programs for personal gain.”
Compliance Perspective
Issue
All laboratory tests performed for residents must be medically necessary in order to bill Medicare, Medicaid, or a private insurance company. When determining if a test or procedure is medically necessary, the results of the test should be needed to diagnose or treat an illness, injury, condition, or disease, or its symptoms. Claims for tests or procedures that are unnecessary in diagnosing or treating an illness, injury, condition, disease, or its symptoms may be seen as violations of the False Claims Act and may result in fines, criminal charges, and other sanctions.
Discussion Points
- Review your policies and procedures for laboratory testing services, including billing practices for laboratory testing, and for preventing and reporting false claims and anti-kickback statute violations. Update as needed.
- Train staff to ensure that ordered testing is medically necessary, and that if a laboratory test or other ordered service is considered medically unnecessary, the order should be clarified before proceeding. Include your medical director in this effort so he or she can intervene if a provider is not appropriately determining medical necessity for residents. Train all staff on the Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that these trainings occurred and file each document in the employee’s individual education files.
- Periodically audit to ensure that laboratory tests meet the criteria for medical necessity. Survey professional staff on their knowledge of what can be considered medical necessity. Also periodically audit staff understanding to ensure that they are aware of what should be done if they suspect unnecessary services are ordered, false claims are being submitted, or an illegal kickback has occurred.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
