Golden Gate Chapter of CLMA Spring Fling 2011 Regulatory Challenges for Clinical Laboratories

1. Golden Gate Chapter of CLMA Spring Fling 2011Regulatory Challenges for Clinical Laboratories Presented by Christopher P. Young, CHC cpyoung@cox.net

2. Objectives • Understand what changes the government intends to make in the area of regulatory and Medicare and Medicaid compliance in the near future. • Plan for upcoming regulatory and billing changes that may be imposed by the government. • Participants will be able to get specific information about questions they may have concerning their own laboratory problems and issues. 

3. Recent Congressional Testimony • Daniel R. Levinson, Inspector General (IG), Dept of Health and Human Services (HHS) • March 2nd and March 9th gave testimony before several congressional committees • Lewis Morris, Chief Counsel to the HHS IG • March 2nd testimony to House Ways and Means subcommittee on Oversight • Gerald T. Roy, Deputy Inspector General for Investigations, HHS • Omar Pérez, Assistant Special Agent in Charge, OIG, HHS

4. Daniel Levinson – HHS - OIG • “Fraud is a serious problem requiring a serious response” • “the majority of health care providers are honest and well-intentioned” • Purposefully billing for services never provided • Purposely billing for services that are not medically necessary • Billing for a higher level of service than was provided • Misreporting cost or other information to increase payments • Paying or receiving kickbacks • Illegal or improper marketing of products • Providing substandard or poor quality care • Stealing providers’ or beneficiaries’ identities

5. Waste, Fraud and Abuse • CMS estimates that 10.5% of fee for service claims paid in FY 2010 did not meet program guidelines • Government considers these “errors in payment” found through its error testing audits like CERT and RAC audits • Main reasons: • Insufficient documentation • Miscoded claims • Medically unnecessary services

6. Collaborative Effort • “Collaboration and innovation are essential in the fight against health care fraud” • Many new CMS integrity contractors to supplement the MACs • HIPAA of 1996 established the Health Care Fraud and Abuse Control (HCFAC) Program • Return on investment in this program is $6.80 returned for every $1.00 spent • $4 billion in FY 2010, $18 billion since 1997 • May 20th, 2009 HHS Secretary and Attorney General announced creation of Health Care Fraud Prevention and Enforcement Action Team (HEAT)

7. FBI Fugitives-10 Most Wanted OIG Fugitives: Clara Guilarte and Caridad Guilarte were captured in Colombia on March 13, 2011 The Guilartes allegedly defrauded Medicare of nearly $4.3 million (and submitted $9.1 million in false and fraudulent claims), according to a Federal indictment

8. FBI Fugitives-10 Most Wanted Current version of the OIG wanted list

9. CMS Integrity Contractors • Medicare Administrative Contractors (MAC) • Medicare Secondary Payer Recovery Contractor (MSPRC) • Zone Program Integrity Contractors (ZPICs) • Qualified Independent Contractors (QICs) • Quality Improvement Organization (QIO) • Recovery Audit Contractors (RACs) • Comprehensive Error Rate Testing auditors (CERT) • Medicaid Integrity Contractors (MIC)

10. FERA of 2009 and ACA • Significantly expanded the scope and applicability of the Federal False Claims Act (FCA) and made sure that sufficient resources are available • Ensures that the FCA is applicable to Medicaid and Medicare Advantage Plans • Changed the Antikickback law so that no proof of a specific intent to defraud is required • Extends liability for overpayments making them an FCA violation if not promptly retuned (60 days) • FERA and ACA significantly changes the consequences of any violations of laws and regulation

11. Reporting and Returning Overpayments • If a person has received an overpayment, the person “shall” • Report and return the overpayment • Report means a written statement of the reason for the overpayment • Report shall be to the “Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address” • The deadline for returning and reporting is 60 days from the date the overpayment is identified or the date a cost report (if applicable) is due • Failure to report and refund by the 60 day deadline constitutes an actionable violation of law (an obligation) so, missing the deadline turns a simple error and refund into a potential FCA violation

12. Example Refund vs FCA • Example: Overpayment caused by computer error discovered in a routine audit – Test X @ overpayment of $10.00 per test. Test X volume is 15 tests/day • Refund example: Example – Test X @ $10.00/test – volume of 15/day for 3 months (21 days x 3=63 days) = 945 tests with a refund of $9,450.00 • If not refunded in 60 days it becomes an “obligation” and is potentially an FCA violation • Treble Damages - 3x amount of the overpayment or $28,350.00 • Penalties - $5,500 - $11,500 per false claim filed • FOR A $9,450.00 REFUND PROBLEM NOT PAID BACK IN 60 DAYS, FCA SANCTIONS COULD GO AS HIGH AS $10.8 MILLION

13. Permissive Exclusion Authority • No program payment may be made for any item or service that an excluded person or entity furnishes, orders, or prescribes • Entities cannot employ excluded individuals • OIG weighs fraud risk against considerations like access to care • Some entities cannot be excluded because they are too big or are a sole provider, etc. • Discretionary exclusion allows the government to exclude individuals and executives of companies • Are excluded as “responsible corporate officers”

14. OIG Workplan 2011 • Laboratory Test Unbundling by Clinical Laboratories • Medicare Part B Payments for Glycated Hemoglobin A1C Tests • Frequency of tests should not be less than every 3 months • Trends in Laboratory Utilization • What tests are done and difference in ordering by specialty and geography

15. OIG Workplan 2011 • Lab Test Payments: Comparison of Medicare with Other Public Payers • Compares top 10 tests Medicare payments against other payers like the VA and Medicaid programs • Medicare Payments for Claims Deemed Not Reasonable and Necessary • Not necessarily lab specific • Looks for GA and GZ modifiers and compares similar claims for similar services

16. OIG Workplan 2011 • Medicare Billings With Modifier GY • Not necessarily lab specific • Examines use of GY modifiers • Payments for Services Ordered or Referred by Excluded Providers • Variation in Coverage of Services and Medicare Expenditures Due to Local Coverage Determinations • Over 2800 LCDs exist

17. OIG Workplan 2011 • Zone Program Integrity Contractors’ (ZPIC) Identification of Potential Fraud and Abuse • Essentially a review of the effectiveness of these contractors and barriers they encounter in fulfilling their responsibilities • Early Results From Medicaid Integrity Contractors (MIC) • Examines the effectiveness if these contractors

18. Mandatory Compliance Program • The Office of Inspector General (OIG) will set the requirements for these compliance programs • At a recent OIG Compliance Program Training session presenters from the OIG office indicated that likely means these programs will be similar to the existing compliance guidance documents issued by the OIG for many segments of health care • Including clinical laboratories (August 1998)

19. What They Know • Compliance is different from the view of the audit contractor versus the view of the OIG, FBI investigator or Department of Justice (DOJ) prosecutor • The audit contractor is concerned with overpayments and primarily billing and coding issues and not necessarily with your compliance program • Federal agent or prosecutor is very much concerned with your compliance program

20. Most Important • The compliance program should keep you in the realm of the contractor and out of the realm of the investigator or prosecutor • This means • Prevent, Detect, Refund and Correct • rather than • Discover, Disclose, Settle and CIA

21. Some Current Issues • In this section we will briefly overview the new molecular diagnostics coding and what that means for laboratories • We will also address some other current compliance issues we are seeing in the laboratory industry • We will also provide you an opportunity to discuss any problems you want to discuss and tell us about your contractor’s activities

22. New Molecular Diagnostic CPT Coding • Effective in the 2012 AMA CPT code book, a new set of codes for molecular diagnostics will be published • Changes do not affect microbiology and most cytogenetic assays • Analytes/tests that have new codes assigned and are listed in Tiers 1 and 2 MUST be coded using the most specific CPT code available and NOT with ‘stacking codes’ (83890-83914) • Most likely, stacking codes will be eliminated by 2013

23. New Molecular Diagnostic CPT Coding • Tests are divided in “tiers” • Tier 1 tests are the most commonly performed tests and each will have a specific CPT code • Tier 2 tests have been assigned to 9 resource level codes similar to the currently existing system for surgical pathology • Any tests not included in tiers 1 or 2 would be coded using the existing stacking codes • Codes include all analytical services required to perform the assay (e.g., cell lysis, nucleic acid stabilization, extraction, digestion, amplification, and detection) • Interpretations may be required for these tests and would be professional component services unless some kind of change occurs to allow Ph.D. level payment

24. New Molecular Diagnostic CPT Coding • Definitions are provided to ensure all reviewers are interpreting information in the same way • Example: Exon: typically, one of multiple nucleic acid sequences used to encode information for a gene product (polypeptide or protein). Exons are separated from each other by non-protein-coding sequences known as introns. Exons at the respective ends of a gene also contain nucleic acid sequence that does not code for the gene’s protein product. • Very useful for those who are both knowledgeable and those who are not in terms of providing coding guidance

25. New Molecular Diagnostic CPT Coding • It is important to note the following (from the AMA request for feedback) • The information below is NOT final. Code assignment and final wording can be a source of confusion if portrayed as final • The codes and descriptors below are NOT yet available for reporting and are NOT yet recognized in any code set • The code numbers that precede each descriptor below are administrative alphanumeric placeholder designations used by the MPCW to track progress in construction of the code set and are not valid code numbers • The inclusion of an analyte in the CPT code set does not imply any health insurance coverage or reimbursement policy. While these descriptors describe a service, payment policy will determine appropriate payment for these services

26. New Molecular Diagnostic CPT Coding • Tier 1 examples: • BXXX7 BRCA1, BRCA2 (breast cancer 1 and 2) (e.g., hereditary breast and ovarian cancer) gene analysis; full sequence analysis and common duplication/deletion variants in BRCA1 (i.e., exon 13 del 3.835kb, exon 13 dup 6kb, exon 14-20 del 26kb, exon 22 del 510bp, exon 8-9 del 7.1kb) • BXXX8 185delAG, 5385insC, 6174delT variants • BXXX9 uncommon duplication/deletion variants • Tier 1 includes 92 codes including the HLA typing codes

27. New Molecular Diagnostic CPT Coding • Tier 2 are used for tests not included in Tier 1 • They are arranged by level of technical resources and interpretive work by the physician or other qualified health care professional • Each code includes a parenthetical describing the criteria used to classify tests into that level • Each level includes lists of specific tests that are included

28. New Molecular Diagnostic CPT Coding • Tier 2 examples: • L2XX1 Molecular pathology procedure, Level 1 (e.g., identification of single germline variant [e.g., SNP] by techniques such as restriction enzyme digestion or melt curve analysis) • ACADM (acyl-CoA dehydrogenase, C-4 to C-12 straight chain, MCAD) (e.g., medium chain acyl dehydrogenase deficiency), K304E variant • ACE (angiotensin converting enzyme) (e.g., hereditary blood pressure regulation), insertion/deletion variant • AGTR1 (angiotensin II receptor, type 1) (e.g., essential hypertension), 1166A>C variant

29. More Tier 2 Examples • L2XX3 Molecular pathology procedure, Level 3 (e.g., >10 SNPs, 2-10 methylated variants, or 2-10 somatic variants [typically using non-sequencing target variant analysis], immunoglobulin and T-cell receptor gene rearrangements, duplication/deletion variants 1 exon) • CYP21A2 (cytochrome P450, family 21, subfamily A, polypeptide 2) (e.g., congenital adrenal hyperplasia, 21-hydroxylase deficiency), common variants (e.g., IVS2-13G, P30L, I172N, exon 6 mutation cluster [I235N, V236E, M238K], V281L, L307FfsX6, Q318X, R356W, P453S, G110VfsX21, 30-kb deletion variant) • KIT (v-kit Hardy-Zuckerman 4 feline sarcoma viral oncogene homolog) (e.g., mastocytosis), common variants (e.g., D816V, D816Y, D816F) • MEFV (Mediterranean fever) (eg, familial Mediterranean fever), common variants (eg, E148Q, P369S, F479L, M680I, I692del, M694V, M694I, K695R, V726A, A744S, R761H)

30. New Molecular Diagnostic CPT Coding • The AMA CPT Editorial Panel sought feedback on these new codes • Concerns about the specific wording of any particular code descriptor • Concerns that a specific analyte is not currently identified in the code list • Concerns that a currently medically useful multi-analyte molecular pathology assay (MMA or IVDMIA [In Vitro Diagnostic Multivariate Index Assays] is not currently identified in the code list) • Feedback included revisions to the code descriptors or suggested additional analytes

31. New Molecular Diagnostic CPT Coding • Feedback request letter provided a website to submit requests or suggestions including the appropriate forms to use for those purposes • Deadline for submissions was 4/15/2011 • http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt.shtml

32. Key Areas and Actions • The introduction of these codes will require a complete revamping of the molecular diagnostics section of your chargemaster to accommodate the new codes • The introduction of these codes will affect new LDTs that are developed in genetic and molecular testing facilities • These tests will be priced during the CMS new test code pricing process conducted starting in July of 2011 • Provides an opportunity to properly value these tests based on the work and expertise required to perform them

33. CMS Contractor Audits • The following list is a list of issues that labs from various parts of the country are reporting that their contractors are pursuing or related issues in the OIG Workplan or RAC issues pages • Labs are having to refund money to their contractor based on these issues and problems • These are not necessarily RAC contractors but appear to be coming from the MACs, CERT and PSC (now ZPIC) contractors

34. Current Issues • CBC and Differential • Some contractors are auditing for orders for “CBC” that do not specifically order a differential and requiring refund if the lab performed one • Direct measure LDL • Some contractors are using a section in the Correct Coding Initiative Manual (CCI), Chapter 10 that says that a direct measure LDL is only necessary if the Triglyceride is greater than 400 mg/dl to seek refunds from labs that are doing the direct measure LDL routinely

35. Other Issues That May Arise • Improper use of the 59 modifier • CMS has published several documents concerning the proper use of this modifier and audits focused on its use are listed in both the OIG Workplan and some of the RAC “current issues” list • Too frequent use of the HgbA1c for monitoring diabetic patients • MUE issues where a provider is doing more units of service than other providers consistently

36. How You May Get Caught • CMS data mining techniques that seek and find testing at a greater frequency or higher volume than other providers • Medicare-Medicaid matching program where a problem is found in one program so the review checks the billing for the other program to determine if the same problem exists • Whistleblowers

37. Participant Problems and IssuesQuestionandAnswers