HCFA marshals CLIA surveyors in anti-fraud campaign; FDA hands out CLIA waivers

Medical Laboratory Observer, April, 1998 by Joan Szabo

The federal government's get-tough-on-medical-fraud campaign is serious business. Here's what's afoot the Health Care Financing Administration recently announced plans to widen an existing pilot program designed to investigate potential fraud or other improper billing by laboratories performing Medicare and Medicaid services.

The program began in 1997 in the states of New Jersey and Florida. Ibis year it will continue in those states and expand to three others--California, Pennsylvania, and Washington.

"HCFA believes program integrity is part of everything we do, and when it sees potential areas for abuse, we are going to continue to find ways to look at that and to get our money back where it has been inappropriately spent," asserts a HCFA spokesperson.

Scrutinizing billing patterns

Which labs are being targeted? Those with "unusual billing patterns." This generally involves any lab where there is "a high volume of services or high volume of expenditures," says the HCFA spokesperson. Also setting off alarm bells are laboratories that have a fairly steady state of service spending and then suddenly "blip up to a large expenditure," the HCFA spokesperson says. The government is on the lookout for "patterns of unusual utilization expenditure."

The surveyors are verifying billing records to clinical data and checking with test-ordering physicians. They have found cases of upcoding, billing for services never ordered or never performed, and a case where a single blood specimen was tested, but results were reported for up to 30 patients.

In both New Jersey and Florida, large overpayments to some labs have been identified, asserts the HCFA spokesperson. Penalties for wrongdoing include suspension from the Medicare and Medicaid programs and revoking their license.

The program is part of the government's Operation Restore Trust, a federal effort undertaken to crack down on Medicare fraud by some home health agencies. ORT is a combined effort of the Health and Human Services Department the Justice Department, and law enforcement agencies. A key feature of ORT is the coordination of law enforcement efforts among various federal agencies.

Making use of CLIA surveyors

In what seems a bit unusual to the clinical lab industry, HCFA's pilot anti-fraud program is using state surveyors under contract to conduct lab surveys under the 1988 Clinical Laboratory Improvement Amendments. They are checking for fraud as an add-on to their CLIA survey work, the HCFA spokesperson explains. "We are using the expertise of CLIA surveyors because they are laboratorians. They go into these labs after they have received some training from us on what to look for," she adds.

The federal government is quick to point out that the work of CLIA surveyors on checking for fraud is not financed with CLIA user fees. Under law, these fees can only be spent to cover CLIA program costs. The first stage of the pilot was financed by HCFA and the Justice Department under the 1996 Health Insurance Portability & Accountability Act. Ibis year the pilot is being financed by the agency's program integrity budget.

Stay tuned. It's possible that at some point the pilot project may become a full-fledged nationwide effort, but for now it will be limited to five states and will target labs with unusual billing practices.

FDA expands lab involvement

Is the Food and Drug Administration spreading its regulatory wings too far into the lab arena? There's some indication it might be, say lab sources. They cite two recent events as evidence. One involves two prothrombin time tests that were cleared by the FDA for prescription home use and received a CLIA waiver from the Centers for Disease Control & Prevention.

In addition, an HIV home test kit from Home Access Health Corporation received a CLIA waiver from the FDA, which said the company could perform it as a self-referral test.

John Boffa, a New Jersey lab consultant, worries that the FDA is getting more involved directly in the regulation of lab testing. As far as CLIA is concerned, he says, "CDC should have jurisdiction of interpretation of regulation and any changes in regulation," rather than the FDA. CLIA waivers normally come from the CDC. The FDA stepped in for the HIV test because its job is to classify the tests; and the classification as a self-referral test meant it can waive CLIA. Boffa says that in both cases (prothrombin and HIV), the FDA is setting up test categories not in CLIA.