Government gets $16 million in Urine Drug Testing False Claim Case: Here’s How You Avoid This Common Healthcare Compliance Pitfall

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One of the most frequent problems we encounter during our audits of physician practices is the structure of the practice’s urine drug testing program. We all know that the CDC guidelines and many state regulations require practices prescribing controlled substances to conduct a urine drug test on nearly all patients at regular intervals. In typical government fashion, the Government is taking a swing at providers who are testing too much in the form of civil and criminal action. Anecdotally, as a litigator I am leading the defense of a number of physicians who are on the wrong end of federal healthcare audits for doing what they thought was the right thing, conducting urine drug tests and confirming the results. That’s why I founded CCG – to give you the right compliance advice before you are the target of federal scrutiny. Our goal is to help steer practices in the right direction BEFORE the federal government starts poking around – or worse! Here’s how you can avoid civil and criminal investigation related to your urine drug testing program.

 

 

But first, a case study.

 

On October 20, 2021 MD Labs and its Co-Founders agreed to pay up to $16 million to resolve allegations of fraudulent billing related to urine drug tests. Denis Grizelk and Matthew Rutledge (the owners) have agreed to pay $16 million to resolve a pending civil case brought by the department of justice. What offense was there? Conducting a presumptive urine drug test in order to get quick qualitative results and then immediately conduct a confirmatory test designed to quantify those results and provide actual information that can be used to further patient care. The Government claims that the owners knew that doctors would not review presumptive urine drug testing results when they already had the more precise confirmatory results and that absent a presumptive UDT result there was nothing to confirm. 

 

This Government logic evades reality.

 

As many doctors know, a lot can be gleaned from confirming a presumptive result. Let’s take the example of a patient who is prescribed Oxycodone for pain management. The patient comes to the doctors office and gets a monthly presumptive test that can be immediately read by the provider to see if the medication is in their system or if there are any illicit drugs in their system. The patient can be counseled appropriately and a more limited dose of medication could be prescribed while the provider awaits the results of the confirmatory test. Presumptive UDT tests not reliable and often confirmatory results reveal the presence of medication despite negative presumptive results. Therefore a confirmatory result is often necessary especially where patients are high risk. Additionally, presumptive results generally only reveal the presence or absence of opiates but fail to tell a provider if those results are from heroin or oxycodone. Even with a positive presumptive result for opiates a further test should be conducted in high-risk patients to determine if the patient is taking the medication or if the positive result is from an illicit drug or a drug that wasn’t prescribed. 

 

So how can we defend this new form of government scrutiny? 

 

Providers must have a clear urine drug testing policy that stratifies risk. We can help you with that. Patients must be placed in a risk category and tested accordingly. Patients with higher risk should be tested more frequently and have their results confirmed more frequently. Patients with a lower risk may be tested only once a year or in other appropriate intervals. When a presumptive test is done it should be documented in the patient file and the need for a confirmatory test should also be documented in the patient record. 

 

Do you need help with your urine drug testing program? 

 

If you need help setting up, modifying or training staff on your drug testing protocols we have you covered. Our expert compliance consultants have government healthcare audit and investigation experience and know the gaps that the government is looking for. We can set up your protocol, train your staff, and ensure your urine drug testing program is ironclad and not subject to government scrutiny. Don’t wait for a costly government audit, civil suit, or potential criminal sanction. Give us a call today so that we can help you achieve ironclad compliance and allow you to do what you do best – practice medicine! 

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Government gets $16 million in Urine Drug Testing False Claim Case: Here’s How You Avoid This Common Healthcare Compliance Pitfall

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The Office of Inspector General (“OIG”) modified the personal services and management contracts safe harbor of the federal Anti-Kickback Statute (“AKS”) earlier this year. These modifications expand protections to payment structures that incorporate value-based care models.

The personal services and management contracts safe harbor was revised in three meaningful ways: (i) replaced the requirement to specify aggregate compensation in advance with a more lenient requirement to specify compensation methodology in advance; (ii) eliminated certain written requirements for part-time or periodic contracts; and (iii) created new protections for outcome-based payment arrangements.

The OIG substituted the requirement that aggregate compensation be set in advance with a requirement that the methodology for determining compensation be set in advance. This change allows more flexibility in designing agreements and mitigates the difficulty of satisfying this Safe Harbor by generating compensation schedules (instead of the methodology) in advance.

Additionally, the new rule better aligns the Safe Harbor with the equivalent Stark Law exception, which streamlines and simplifies drafting of personal services agreements.

Such methodologies must still adhere to Safe Harbor’s other conditions, including requirements that the methodology be commercially reasonable, consistent with fair market value, and not take into account referrals or other business implicating federal healthcare programs. The Safe Harbor will not protect arrangements that do not meet the above conditions.

Since the 2021 rule modification of the personal services and management contracts safe harbor is so recent, there are no opinions reflecting the interpretation of what “methodology for determining compensation” from the OIG. However, OIG commentary on the rule changes gives some insight as to the language change under the AKS. OIG commentary indicates that it believes that other safe harbor conditions mitigate the risk of structured agreements that may arguably take into consideration the volume and value of referrals.

OIG has stated that it is possible to structure an arrangement to fit within the safe harbor by using an hourly rate or other set, verifiable formula provided that all other conditions of the safe harbor are met. OIG has also cautioned that parties seeking protection under this safe harbor must evaluate the specific facts and circumstances of their arrangement to determine whether the compensation methodology over the term of the agreement is set in advance before any payment under the arrangement is made. Any remuneration also must meet all other conditions of the safe harbor for protection.

Questions about whether a business practice violates the Federal Anti-Kickback Statute, or whether these new modifications to the Personal Services Safe Harbor are applicable? Call us today for a consultation.

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