Tuesday, April 18, 2017

Unnecessary Genetic Testing on Medicare Skilled Nursing Facility Patients Alleged in Federal Qui Tam Case Involving California Based Laboratory

Genetic testing is currently the subject of numerous qui tam cases and investigations by the Office of Inspector General. This is in addition to any investigations by private insurance carriers. A recent federal qui tam case shows that the government is going after those involved in the ordering of such tests as well as the laboratories.

One issue that arises is where genetic tests are ordered by physicians who are not the regularly treating physicians of the Medicare patients. In order to be considered medically necessary and thus reimbursable under Medicare, the general rule is that the laboratory test must be ordered by the physician treating the resident. 

What happens when a laboratory test is ordered by a physician who is not the regular treating physician of the patient? For example, what if the physician is an outside physician whose only role is ordering a genetic test? In a recent case, a federal qui tam (false claims) lawsuit was filed as a result against skilled nursing facilities who gave a laboratory access to its patients. This lawsuit and settlement can serve as a teaching moment for those who order genetic testing. 

On April 10, 2017, a multi-state nursing home company Prestige Administrative Services, LLC d/b/a Prestige Healthcare (Prestige) based in Kentucky agreed to pay the United States $995,500 to resolve allegations that it violated the False Claims Act with regard to its role in an alleged scheme to falsely bill Medicare for unnecessary genetic testing on skilled nursing home patients in four facilities located in Wisconsin.

The United States alleged that in 2014, Prestige was approached by an entity known as Genomix, LLC, which claimed that it could perform genetic testing on Prestige’s Medicare residents in order to ascertain whether Prestige’s patients were properly metabolizing their medications. 

The United States alleged that in 2014 and 2015, Prestige provided Genomix with insurance and personal medical information, as well as access to Prestige patients in nursing homes in several states, including Wisconsin, for purposes of conducting the testing. Genomix conducted the testing by taking cheek swabs of each Prestige patient and then sending the cheek swab to a laboratory for analysis.

The United States alleged that Prestige failed to ensure that physician orders were obtained for the genetic testing prior to its being conducted, and that Prestige's physicians were not aware of and did not agree with the medical necessity of the testing. 

United States also alleged that Prestige failed to ensure that its patients (or, in some cases, their family members responsible for their medical decisions) were appropriately informed of the testing prior to its being conducted and provided with the opportunity to decline the testing. Finally, the United States alleged that the lack of physician orders and patient consent was discovered during a survey conducted by state regulators in late 2015.

While it is not unusual for skilled nursing facility (SNF) operators, such as Prestige, to coordinate in placing orders with clinical laboratories for medically necessary diagnostic laboratory tests for their residents, the treating physician must order the test. This is a basic tenet that in order to be considered medically necessary and thus reimbursable under Medicare, the laboratory test must be ordered by the physician treating the resident. 

The settlement announced resolved only Prestige’s civil liability and did not resolve any liability of any other individuals or entities, including that of Genomix, which is a separate entity headquartered in Southern California. As part of the settlement, Prestige agreed to cooperate in the United States’ ongoing investigation. 

Based on what we hear in the healthcare legal community, we can expect to see more investigations, lawsuits and even potential criminal prosecutions involving genetic testing. There are allegations in other cases indicating that physicians are being paid as experts or researchers by laboratories to order genetic tests on their patients and that in some cases, these fees are disguised kickbacks. Any physician in such an arrangement with a laboratory should ensure that it is compliant with federal and state law.  

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Work: 213-233-2261
Email: tgreen@greenassoc.com


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