Labs In Court: A roundup of recent cases and enforcement actions involving the diagnostics industry

Breast Cancer Recurrence Test Billing Case Ends in $2 Million Settlement
Case: BioTheranostics has agreed to shell out $2 million to settle claims of falsely billing Medicare for its molecular Breast Cancer Index (BCI) test. BCI, which determines the risk of breast cancer recurrence beyond five years, is used to guide treatment decisions regarding the value of extended endocrine therapy. But the DOJ claimed that BioTheranostics promoted and performed BCI on breast cancer patients who had not been in remission for five years and who had not been taking tamoxifen. In so doing, the San Diego-based company flew in the face of not only Medicare coverage rules but published practice guidelines and clinical trial data finding BCI medically unnecessary for such patients.

Significance: So far, FCA cases targeting billing of medically unnecessary gene expression tests have been relatively rare. Of course, that is bound to change as Medicare broadens its coverage rules for such tests. The BCI case may thus prove to be a harbinger of things to come.

Lab Forks Over $525K to Settle Claims of Inflating Specimen Travel Mileage
Case: The feds accused a Missouri lab of submitting false claims to Medicare for travel fees in transporting specimens from April 2011 to December 2014. In addition to a $525K fine, the lab had to sign a five-year corporate integrity agreement to settle the case.

Significance: The lab allegedly committed two violations of Medicare travel allowance billing rules that caused its mileage claims to be deemed false:

• Logging mileage for specimens transported collectively in a single trip separately rather than prorating the miles among each specimen; and
• Charging for mileage traveled by a non-medical driver rather than by a lab technician.

Self-Disclosed Sleep Study Billing Violations Cost Hospital $252K+
Case: A North Carolina hospital has agreed to fork over $252,455 for improper billing of Medicare and TRICARE for sleep testing and treatment services committed by its sleep center, an amount that might have been higher had the hospital not self-disclosed the violations.

Significance: The OIG does not provide any details about the case or what the hospital did wrong. However, sleep testing by independent and hospital labs has become a high priority of OIG enforcement in recent months, particularly polysomnography, a sleep study in which patients sleep overnight while connected to sensors measuring brain waves, blood oxygen flow and other parameters. The study is commonly used to diagnose obstructive sleep apnea and evaluate the effectiveness of using positive airway pressure (PAP) devices to manage the condition and PAP titration may also be done when the test indicates that a patient has a sleep disorder. (To find out about the billing pitfalls of polysomnography and how to avoid them, see GCA, Jan. 6, 2017.).

Pennsylvania Drug Testing Lab at Center of Alleged Stark Scam
Case:What do Dr. Robert Fetchero of Jeannette, Pennsylvania, Dr. Sridhar Pinnamaneni of Windermere, Florida, and Dr. Thelma Green-Mack of Zionsville, Indiana, have in common—other than being physicians? Answer: All three settled charges of accepting payments for Medicare referrals to Universal Oral Fluid Laboratories (UFOL), a Pennsylvania drug testing lab with which they had an improper financial relationship in violation of the Stark and anti-kickback laws. The price of settlement:

• Dr. Fetchero: $200K;
• Dr. Pinnamaneni: $370K; and
• Dr. Green-Mack:

UFOL's medical director also pled guilty to charges for his role in the scheme which unfolded over a roughly three-year period.

Significance: While drug testing has been the hottest trend in lab enforcement, this case is an old-fashioned kickback scheme rather than the opioid-related abuses that have become so common over the past 18 months.