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

Tennessee Pain Doctor Faces Jail for Opioid Abuses, Medicare Fraud

Case: The doctor is facing 45 charges, including 22 counts of illegal distribution of a controlled substance for routinely prescribing oxycodone and other Schedule II drugs without examining and diagnosing patients, including one Chronic Pain Syndrome patient who died as a result of ingesting "The Holy Trinity" of oxymorphone, Soma and alprazolam. According to the indictment, the doctor required Medicare beneficiaries to visit his office four to six times per month for the same services cash-paying patients only had to come in twice a month to receive. He also allegedly wrote 164 individual prescriptions for over 12,000 Schedule II controlled substance pills the very day the State of Tennessee permanently revoked his Pain Management Certificate.

Significance: As is commonly the pattern in these opioid distribution scams, the doctor allegedly exacerbated his wrongdoings by engaging in Medicare fraud (13 counts) and money laundering (9 counts), including:

• Upcoding claims to indicate a higher level of service than actually provided;
• Billing for services that weren't medically necessary;
• Causing submission of claims for unlawful prescriptions to Medicare; and
• Diverting proceeds of the fraud.

Wisconsin Health System Settles Stark Claims for $12 Million

Case: In a case that began as a whistleblower suit, a company affiliated with Advocate Aurora Health, Inc. has agreed to pay $12 million to settle claims of violating the Stark Law. The US and State of Wisconsin cited the company for improper relationships with a pair of physicians between 2008 and 2012, including providing compensation:

• At above fair market levels;
• That took into account the volume of anticipated referrals; and
• That covered unidentifiable services.

Significance: The case is a good illustration of how whistleblower lawsuits become a lingering pain in the side that may be hard to settle. Although the relator who brought the original suit will get a share of the $12 million recovery, the government intervention covered only some of the original claims. As a result, the settlement doesn't end the litigation and the whistleblower suit will continue as a separate case covering the residual claims. The good news for Aurora is that:

• The government won't be involved in the subsequent case; and
• The settlement will have no bearing on its liability in that case.

HIPAA ePHI Violation Costs Colorado Hospital $111,400

Case: This case began when the Office of Civil Rights (OCR) received a complaint contending that an ex-employee of Pagosa Springs Medical Center (PSMC) still had remote access to the critical access hospital's web-based scheduling calendar containing electronic PHI of 557 patients. OCR investigators confirmed the allegation and found that the ex-employee had accessed the calendar on at least two occasions since leaving PSMC. To make matters worse, PSMC got the calendar from Google without having it sign a business associate agreement (BAA) (at the time, Google Calendar wasn't a HIPAA compliant service the way it is today). In addition to the $111,400 fine, the settlement requires PSMC to sign an onerous two-year Corrective Action Plan with OCR agreeing to overhaul its information security management, BAA and employee training systems.

Significance: The moral of this case is to ensure that your lab:

• Immediately terminates employees' access to ePHI when they leave your company or remain but no longer require access to do their jobs; and
• Enters into a BAA with vendors before disclosing your ePHI to them.

Pain Management Clinic, 2 MDs Pay $99K to Settle Millennium Free POCT Cup Kickback Claims

Case: An Oklahoma pain management practice and two of its physicians are the latest to settle kickback claims for accepting free point of care test cups from now defunct Millennium Laboratories. The settlement amount, $98,942, is the second highest announced since the physician roundup began in autumn 2017. Millennium used the freebies to pay physicians for referrals of custom profile panels and other tests to carry out what the feds claim is the largest ever kickback scandal involving lab services.

Significance: After collecting $256 million from Millennium, the feds have spent the past 18 months targeting the physicians on the receiving end of the POCT cup scandal. (For more on the physician crackdown, see, G2 Compliance Advisor (now Lab Compliance Advisor), June 18, 2018).