News at a Glance – Apr 2015

Arizona Allows Lab Testing Without Doctor Order: Beginning in early July, Arizona residents will be able to order any laboratory test they want without a doctor’s authorization, under a new law signed by Governor Doug Ducey on April 6. The new law does not require laboratories to perform the test nor does it require insurance companies to pay for the testing. Further, it specifically assigns any liability associated with testing or outcomes to the patient ordering the test. The law requires the performing laboratory to include a statement on the test result, in bold type, saying it is the responsibility of the person who was tested to arrange with their health care provider for interpretation of the results. Theranos, a laboratory testing company based in Palo Alto, Calif., supported the law throughout the legislative process. Theranos chief executive Elizabeth Holmes spoke at the signing ceremony that was conducted inside a Theranos local site. The company claims its testing technology allows smaller samples and lower prices than traditional laboratories—prices that Theranos has no problem sharing publicly. Theranos sells tests at 41 Walgreens drug store clinics. According to information provided by Theranos, 27 states, not including Arizona, and the District of Columbia allow consumers direct access to laboratory testing. There are 13 states that prohibit direct access for consumers. Generally, doctors and traditional laboratories do not support unlimited consumer direct access to testing.
HHS OIG Collaborates With Industry Leaders on Compliance Oversight: On April 20, the U.S. Department of Health & Human Services’ Office of Inspector General (OIG) announced the release of a document, developed with the collaboration of leading industry trade groups, to offer guidance to governing boards of health care companies regarding their oversight of compliance plans. The American Health Lawyers Association, the Association of Healthcare Internal Auditors and the Health Care Compliance Association co-authored the guidance which highlights the audit, compliance and legal roles in comprehensive and effective compliance programs. According to the press release, the 19-page document is an educational resource that will benefit compliance officers, compliance auditors and legal counsel in addition to the boards to which they report, providing practical ideas, tools and tips on topics such as compliance policies, compliance reports to the board, and identifying compliance risks. It is meant to be flexible so its advice can be applied by boards of all sizes. The document, titled “Practical Guidance for Health Care Governing Boards on Compliance Oversight,” can be found on the OIG’s and the collaborating organizations’ websites.
Lawsuit Win Invalidates RAC Payment Terms, Delays Contract Renewals: When the Centers for Medicare and Medicaid Services (CMS) put out its Request For Quotes to renew contracts with Recovery Audit Contractors (RACs) for 2014, it included some changes to the way RACs are paid and was sued by CGI Federal, Inc. (CGI) as a result. CGI contends that the new payment provisions, that change the payment timing from the first level of appeal to the second level of appeal, is inconsistent with commercial practice asis required by the Federal Acquisition Regulations. This change has the potential to delay payments to more than 400 days. In a recent ruling by the United States Court of Appeals for the Federal Circuit, the new payment provisions were invalidated, delaying the award of contracts until CMS either deletes the new payment terms or seeks a waiver to include them, which will delay the contract awards even further.