Most of today’s laboratories and diagnostic providers are running on even slimmer profit margins. This is due in great part to lower reimbursements resulting from the Protecting Access to Medicare Act (PAMA) clinical laboratory fee schedule (CLFS) that came into effect in early 2018. In this environment there can sometimes be a tug-of-war between doing things “by the book” and taking some compliance risks, especially if we see our competitors “pushing the envelope”. It can be tempting to turn a blind eye, or even establish policies believed to maximize short-term financial performance. While tempting though, these shortcuts can lead to significant, long-term ramifications on your business.
We’ve all seen the articles. Whether an executive team is well-meaning but sloppy, or outright trying to manipulate the system, laboratories and other diagnostic providers are disproportionately scrutinized when it comes to compliance. And it’s not just toxicology labs and pain management organizations who are put under the microscope. Routine payor audits may not only be for issues like medical necessity or E&I, but increasingly question your billing practices. This could be your undoing if you have bent the rules in the name of staying competitive. There is also a very strong qui tam, or whistleblower, environment. It can be that very competitor, a disgruntled current or ex-employee, or even an angry patient who tries to direct that microscope in your direction. The incentives for them are great!
Mis-steps (whether intentional or not) carry reputational risks as well as the risk of substantial fines and even criminal prosecution in the extreme. Compliance issues can be especially problematic if you are looking for investors or considering selling your firm and are an integral part of any due diligence process. Frankly, taking shortcuts to boost near-term revenue, or having a history of audits, complaints or negative press (whether legitimate or not) is unacceptable to any investor or buyer. It’s just not worth it.
Ensuring that regulatory and legal billing practices are consistently followed is paramount. This means removing policies that are hard-coded into your systems and may no longer be compliant, as well as identifying and eliminating any errors in mandatory reporting. It is also imperative for you, and your systems, to be continually updated on the most current rules. And don’t forget reviewing your requisitions and customer relationships to make sure they are in line with the most up to date policies.
How Do You Help Your Organization Stay Compliant?
Now that I’ve reinforced that it’s really not worth getting caught with your hand in the cookie jar, how do you help keep the rest of your team steering clear of any compliance trouble?
Let’s face it, the burden is on you to prove your innocence if questioned by a payor or a government agency. Rather than getting caught up in a case that could literally take years to resolve and drain your lab’s vital resources, earn and maintain a proven track record on compliance.