Labs on the hot seat for referral payments

Are laboratory payments to doctors for test referrals illegal kickbacks? That question made news recently in stories about the government's position on this topic and providers who find themselves at odds with it.  

Health Diagnostic Laboratory, Inc. in Virginia, for example, is under investigation for paying some doctors $20 for each blood sample sent to them for cardiovascular biomarker testing, according to the Wall Street Journal. The lab says this fee fairly compensated practitioners for the costs of processing and handling blood, which exceed the $3 Medicare pays doctors for venipuncture. But HDL paid some providers more than $4,000 a week in blood sample fees, and the lab collected 41 percent of its $383 million revenues last year from Medicare. These numbers raised eyebrows.

The Office of Inspector General warned in a special fraud alert last June that lab payments to referring providers create "a substantial risk of fraud and abuse under the anti-kickback statute." HDL claims this fraud alert is new government guidance and has since stopped paying for blood test referrals.     

The government says kickbacks exploit healthcare programs, inflate costs and thwart competition, according to Becker's Hospital Review. Kickbacks may also skew practitioners' medical decisions.

To this point, "there is no persuasive evidence that these advanced [cardiovascular biomarker] tests can in fact lead to early detection, prevention and treatment of cardiovascular disease," Forbes noted. While "a small community of passionate believers" disagree, the American Heart Association and the American College of Cardiology haven't recommended routine use of these specialized tests, Forbes reported.  

Another provider under investigation is Universal Oral Laboratories of Pennsylvania. Prosecutors allege that the lab's owner, William J. Hughes, built his business by paying kickbacks to doctors for sending patients' saliva samples for prescription drug adherence testing, according to the Pittsburgh Post-Gazette.

The U.S. Attorney's complaint says Universal paid doctors kickbacks to become the exclusive lab for drug testing services. From 2011 to 2013, insurers paid Universal $42 million, with Medicare Part B paying $11.2 million, the newspaper added.                

For more:
- read the WSJ article (subscription required)
- here's the OIG special fraud alert (.pdf)
- view the Becker's Hospital Review article
- see the Forbes article
- read the Pittsburgh Post-Gazette article