Lab Settles Specimen Collection Fee Kickback Charges for $2.275 Million

Case: Cleveland HeartLab (CHL) has agreed to pay $2,275,094 after self-disclosing to the OIG that it paid remuneration in the form of payments to physicians and physician groups for collecting, processing and handling blood specimens. The offenses occurred during a four-year period between 2010 and 2014, three years before CHL was acquired by current owner Quest Diagnostics. Significance: OIG Advisory Opinions and court cases, including the notorious Health Diagnostics Laboratory (HDL) case involving the payment of a $10 to $17 per test processing fee to physicians have made it abundantly clear that processing fee arrangements raise bright red flags under the Anti-Kickback Statute and Stark Law. (See Lab Compliance Advisor, Dec. 10, 2018, for more complete analysis of managing kickback risks associated with specimen processing fees.) More legally sound alternatives to help physicians manage the costs of specimen collection and processing include: Establishing a collection station near the offices of your physician clients; and/or Placing a phlebotomist or staff member compensated by your lab at fair market value within their facilities.