Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices 9435

Place: Spring Room, Silver Spring Holiday

Inn, 8777 Georgia Avenue, Silver Spring,

Maryland 20910.

The meeting is open to the public with the

exception of the period from approximately

8:30 a.m. until 9:30 a.m. on April 18, when

grant applications will be reviewed.

Agenda: Updates on and discussion of

Agency, Bureau and Division activities, and

the legislative and budget status of programs;

overview of the national nursing workforce;

review of nurse practitioner workforce

trends, implications and options for the

future; review of nursing informatics

workgroup recommendations for a national

agenda.

Anyone wishing to obtain a roster of

members, minutes of meeting or other

relevant information should write or contact

Ms. Elaine G. Cohen, Acting Executive

Secretary, National Advisory Council on

Nurse Education and Practice, Health

Resources and Services Administration,

Parklawn Building, Room 9–36, 5600 Fishers

Lane, Rockville, Maryland 20857, Telephone

(301) 443–5786.

Agenda Items are subject to change as

priorities dictate.

Dated: February 25, 1997.

J. Henry Montes,

Director, Office of Policy and Information

Coordination, HRSA.

[FR Doc. 97–5071 Filed 2–28–97; 8:45 am]

BILLING CODE 4160–15–P

Office of Inspector General

Publication of the OIG Model

Compliance Plan for Clinical

Laboratories

AGENCY: Office of Inspector General

(OIG), HHS.

ACTION: Notice.

SUMMARY: This Federal Register notice

sets forth the recently issued model

compliance plan for clinical laboratories

developed by the Office of Inspector

General in cooperation with, and input

from, several provider groups and

industry representatives. Many

providers and provider organizations

have expressed an interest in better

protecting their operations from fraud

through the adoption of compliance

plans. We believe the development of

this initial model compliance plan for

clinical laboratories will serve as a

positive step towards promoting a

higher level of ethical and lawful

conduct throughout the health care

industry.

FOR FURTHER INFORMATION CONTACT: Joel

J. Schaer, Office of Counsel to the

Inspector General, (202) 619–0089.

SUPPLEMENTARY INFORMATION: The

creation of model compliance plans has

become a major initiative of the Office

of Inspector General (OIG) in its effort

to engage the private health care

community in the fight to combat fraud

and abuse. In developing these

compliance plans, the OIG continues to

work closely with the Health Care

Financing Administration and various

sectors of the health care industry.

The clinical laboratory model

compliance plan represents the OIG’s

initial effort to develop such a plan for

use by the industry. The plan considers

elements of the Federal Sentencing

Guidelines and policy guidance given to

major independent laboratories through

corporate integrity agreements.

Specifically, this model plan

recommends that clinical laboratories

implement a number of substantive

changes, such as developing better

requisition forms and policies that

promote the physician’s right to order

only medically necessary tests.

Adoption of the clinical laboratory

model compliance plan set forth below,

and future model compliance plans for

other health care providers, will be

voluntary. All future models will be

similarly structured, that is, substantive

policy recommendations resulting from

our investigations and civil settlements

combined with the elements of the

Federal Sentencing Guidelines.

A reprint of the OIG model

compliance plan follows.

MODEL COMPLIANCE PLAN FOR CLINICAL

LABORATORIES

Introduction

The Office of Inspector General (OIG)

of the Department of Health and Human

Services (HHS) and other Federal

agencies charged with responsibility for

enforcement of Federal law have

emphasized the importance of

voluntarily developed and implemented

compliance plans. In recent years, the

OIG has been asked to supply guidance

as to the elements of a model

compliance plan. The purpose of this

issuance, therefore, is to respond to

those requests by providing some

guidance to health care providers that

supply clinical laboratory testing

services for Medicare and Medicaid

beneficiaries. Like other compliance

plan models that will be issued for other

areas of the health care community, this

guidance is based upon the OIG’s

experience in fraud investigations of

clinical laboratories, the Health Care

Financing Administration’s (HCFA)

regulations and guidelines,

requirements imposed on clinical

laboratories in corporate integrity

agreements negotiated by the OIG, and

input from the clinical laboratory

industry.

The government, especially the OIG,

has a zero tolerance policy towards

fraud and abuse and will use its

extensive statutory authorities to reduce

fraud in Medicare and other federally

funded health care programs.

Compliance plans offer the health care

provider an opportunity to participate

in a nationwide effort to reduce fraud

and abuse in our national health care

programs. The OIG believes that through

a partnership with the private sector,

significant reductions in fraud and

abuse can be accomplished. Compliance

plans offer a vehicle to achieve that

goal.

This information is being supplied to

assist laboratory providers in crafting

and refining their own compliance

plans. Elements of these guidelines can

be used by all laboratories, regardless of

size, to establish a compliance program.

We are not suggesting that all

laboratories must implement all of the

compliance elements discussed in this

document, nor do we suggest that a

laboratory that does not incorporate all

of these elements will be at a

disadvantage when under the scrutiny

of the OIG or other governmental

agency. Rather, these guidelines

represent the government’s suggestions

on how to correct and prevent

fraudulent activity, and they can be

tailored to fit the individual needs and

financial realities of any clinical

laboratory, be it an independent

national laboratory, a hospital

laboratory, or a small, regional

laboratory. We expect variations

reflecting the specific factual context in

which each individual laboratory

operates.

This model compliance plan focuses

on topic areas recently addressed in

corporate integrity agreements with

several players in the laboratory

industry. Consequently, this model

laboratory compliance plan is not all

inclusive as to subject matter. We

recognize that laboratories are

accountable for complying with far

more laws, regulations and guidelines

than we have tried to cover in this

model, and we believe that laboratories

implementing compliance plans should

address any and all areas where abuse

may be prevalent in the industry. For

example, the OIG suggests that

laboratory compliance programs should

include training on topics such as, the

anti-kickback act, Stark self-referral

issues and CLIA requirements.

Depending on the nature of its business,

a laboratory also may need to add

specific measures covering areas such as

ESRD testing and billing, which is

governed by rules and regulations and

which has been subject to abuse by

many companies. Ultimately, each

company bears the responsibility for
9436 Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices

determining the appropriate topic areas

and measures to be included in its

compliance program.

We see this model compliance plan as

a dynamic document, and therefore, one

that may be modified or expanded as we

gather more information and knowledge

about best practices and successful

compliance plans. Through this

document, we are attempting to provide

guidance and structure to assist

providers as they attempt to comply

with our civil, criminal and health care

laws. All providers should be aware that

the development and implementation of

compliance programs can raise a host of

sensitive and complex legal issues.

Nothing stated herein should substitute

for or be used in lieu of legal advice

from competent, experienced counsel.

In addition, it should be noted that

implementing a compliance program

will not provide a laboratory with

immunity from criminal, civil or

administrative prosecution, but it may

be a relevant factor in negotiations with

the Office of Inspector General.

Compliance Plan Elements

Every laboratory adopting a

compliance plan should develop a

program and policies that ensure that

the plan is implemented and enforced.

Compliance plans that are merely

cosmetic are not effective and, in the

long run, may harm the laboratory. The

OIG suggests that the comprehensive

compliance program should include, at

a minimum, the following elements: (1)

Written standards of conduct for

employees; (2) the development and

distribution of written policies that

promote the laboratory’s commitment to

compliance and that address specific

areas of potential fraud, such as billing,

marketing and claims processing; (3) the

designation of a chief compliance officer

or other appropriate high-level

corporate structure or official who is

charged with the responsibility of

operating the compliance program; (4)

the development and offering of

education and training programs to all

employees; (5) the use of audits and/or

other evaluation techniques to monitor

compliance and ensure a reduction in

identified problem areas; (6) the

development of a code of improper/

illegal activities and the use of

disciplinary action against employees

who have violated internal compliance

policies or applicable laws or who have

engaged in wrongdoing; (7) the

investigation and remediation of

identified systemic and personnel

problems; (8) the promotion of and

adherence to compliance as an element

in evaluating supervisors and managers;

(9) the development of policies

addressing the non-employment or

retention of sanctioned individuals; (10)

the maintenance of a hotline to receive

complaints and the adoption of

procedures to protect the anonymity of

complainants; and (11) the adoption of

requirements applicable to record

creation and retention. These

compliance program elements are

spelled out in greater detail below.

A. Written Procedures and Policies

Laboratory compliance plans should

require the development and

distribution of written compliance

policies. These policies should be

developed under the supervision and

direction of the chief compliance officer

or the equivalent and should, at a

minimum, be provided to all

individuals who are affected by the

specific policy at issue. One convenient

method of achieving this goal and

maintaining policies is to create a threering compliance policy notebook. This

format permits the filing of new and

amended or revised compliance policies

and ensures that affected individuals

have easy access to the laboratory’s

written policies.

1. Standards of Conduct

Laboratories should develop

standards of conduct for all employees

which clearly delineate the policies of

the laboratory with regard to fraud,

waste and abuse and adherence to all

guidelines and regulations governing

federally funded health care programs.

These standards should be made

available to and understandable by all

employees (e.g., translated into other

languages, if necessary) and regularly

updated as the policies and regulations

of these programs are modified.

2. Medical Necessity

Laboratory compliance plans should

ensure that claims are only submitted to

federally funded health care programs

for services that the laboratory has

reason to believe are medically

necessary. Upon request, a laboratory

should be able to provide

documentation, such as requisition

forms containing diagnosis codes,

supporting the medical necessity of a

service the laboratory has provided and

billed to a Federal program. We

recognize that laboratories do not and

cannot treat patients or make medical

necessity determinations. However,

there are steps that such facilities can

and should take to help maximize the

likelihood that they only bill federally

funded health care programs for tests

that meet the reimbursement rules for

those programs.

As a preliminary matter, the OIG

recognizes that physicians must be able

to order any tests, including screening

tests, that they believe are appropriate

for the treatment of their patients.

However, we believe that physicians

must be made aware that Medicare will

only pay for tests that meet the

Medicare definition of ‘‘medical

necessity’’ and that Medicare may deny

payment for a test that the physician

believes is appropriate, such as a

screening test, but which does not meet

the Medicare definition of medical

necessity. The laboratories themselves

are in a unique position to deliver this

information to their physician clients.

In our opinion, laboratories can and

should advise physicians that when

they instruct the laboratory to seek

Medicare reimbursement for tests

ordered, they should only order those

tests that they believe are medically

necessary for the diagnosis and

treatment of their patients. We

recommend that laboratories implement

the following steps through their

compliance plans or some other

appropriate mechanism to help ensure,

as best they can, that the claims they

submit to federally funded health care

programs meet the appropriate program

requirements:

a. Requisition Design: Each laboratory

(or laboratory company) should

standardize its noncustomized test

offerings and use common, uniform

requisition forms that emphasize

physician choice and encourage doctors

to order, to the extent possible, only

those tests that they believe are

appropriate for each patient. In

addition, the requisition forms should

require physicians to document the

need for each test ordered by inserting

a diagnosis code for each such test. With

respect to chemistry tests, requisition

forms should be designed to require

physicians to order such tests

individually (i.e., separately) unless: (1)

the test is specifically part of a CPT or

HCPCS defined automated multichannel

test series (e.g., 80002–80019, G0058–

G0060 which will be amended to

G0095–G0098); (2) the test is part of a

CPT-defined ‘‘clinically relevant test

grouping’’ such as an organ or disease

panel or profile (e.g., 80050–80099); or

(3) the test is part of a profile that has

been customized at the request of the

physician. In addition, a printed

statement should appear on every

requisition form reiterating that when

ordering tests for which Medicare

reimbursement will be sought,

physicians (or other individuals

authorized by law to order tests ) should

only order tests that are medically

necessary for the diagnosis or treatment
Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices 9437

of a patient, rather than for screening

purposes.

b. Notices to Physicians: All

laboratories should provide all of their

clients with annual written notices that

set forth: (1) The Medicare medical

necessity policy; (2) the individual

components of every laboratory profile

that includes a multichannel chemistry

test or other automated multiple test

result (e.g., 80002–80019, G0058–

G0060); (3) the CPT or HCPCS codes

that the laboratory uses to bill the

Medicare program for each such profile;

(4) the Medicare National Limitation

Amount for each CPT or HCPCS code

used to bill Medicare for each profile

and its components; and (5) a

description of how the laboratory will

bill Medicare for each profile. If the

laboratory engages a physician clinical

consultant, the notice also should

provide the phone number of the

physician clinical consultant and advise

of his or her availability to discuss

appropriate testing and test ordering.

In addition to the general notices

above, laboratories offering clients the

opportunity to create customized

profiles should provide all clients who

request customized profiles with annual

notices that: (1) Explain the Medicare

reimbursement paid for each component

of each such profile; (2) encourage

physicians who are ordering tests for

which Medicare reimbursement will be

sought to order only tests that are

medically necessary for each patient; (3)

inform physicians that using a

customized profile may result in the

ordering of tests for which Medicare

may deny payment; and (4) inform

physicians that the OIG takes the

position that a physician who orders

medically unnecessary tests for which

Medicare reimbursement is claimed

may be subject to civil penalties. Once

again, if the laboratory engages a

physician clinical consultant, the notice

also should provide the phone number

of the physician clinical consultant and

advise of his or her availability to

discuss appropriate testing and test

ordering.

c. Physician Acknowledgments:

Laboratories that agree to customize

profiles in response to physician

requests should require such requesting

physicians to sign a Physician

Acknowledgment. By signing the

Physician Acknowledgment, the

physician would affirm that: (1) The

physician has requested the creation of

a custom profile that includes the tests

listed on the acknowledgment; (2) the

physician has been informed of the

reimbursement amount that Medicare

(and where appropriate, Medicaid) will

pay for each test included in each

customized profile; (3) the physician

understands that when ordering tests for

which Medicare reimbursement will be

sought, the physician should only order

those tests which the physician believes

are medically necessary for each patient;

(4) the physician knows that using a

customized profile may result in the

ordering of tests for which Medicare or

other federally funded health care

programs may deny payment; (5) the

physician will order individual tests or

a less inclusive profile when not all of

the tests included in the customized

profile are medically necessary for an

individual patient; (6) the physician has

been informed that the OIG takes the

position that a physician who orders

medically unnecessary tests may be

subject to civil penalties; and (7) if

appropriate, the physician is aware that

the laboratory makes available the

services of a clinical consultant to assist

the physician in ensuring that

appropriate tests are ordered.

d. Test Utilization Monitoring: The

OIG believes that laboratories can and

should take the steps described above to

help ensure that physicians will make a

determination and document the

medical necessity of tests billed to the

Medicare program. We also believe that

there are steps laboratories can take to

determine whether physicians are being

encouraged to order medically

unnecessary tests. The OIG believes that

a laboratory which has reason to believe

that its clients are ordering medically

unnecessary tests has a duty to

determine why that behavior has

occurred. More importantly, if the

laboratory discovers that it has in some

way caused that behavior, we believe

the laboratory has the duty to correct the

cause.

Recognizing that there may be other

ways to do so, the OIG suggests the

following methodology for monitoring

test utilization and detecting ordering

abuses. We suggest that laboratories

retain and analyze test utilization data

from year to year, by CPT or HCPCS

code, for the top 30 tests they perform

for Medicare beneficiaries. Laboratories

could do this by keeping track of the

number of tests performed by CPT or

HCPCS code or of the number of claims

submitted to Medicare for each test. The

laboratories would then compute the

percentage growth in claims submitted

for each of the top 30 tests from one year

to the next. We believe that if a test’s

utilization grew more than 10 percent,

the laboratory should undertake a

reasonable inquiry to ascertain the cause

of such growth. If the laboratory

determines that the increase in test

utilization occurred for a benign reason,

such as the acquisition of a new

laboratory facility, then the laboratory

need not take any action. However, if

the laboratory determines that the

increase in utilization was caused by the

use of basic chemistry profiles or some

other action on the part of the facility,

the laboratory should take any steps that

it deems reasonably necessary to

address the issue and to insure that

fraud is not being committed.

3. Billing

Laboratory compliance policies

should ensure that all claims for testing

services submitted to Medicare or other

federally funded health care programs

are accurate and correctly identify the

services ordered by the physician (or

other individual authorized by law to

order tests) and performed by the

laboratory.

a. Selection of CPT or HCPCS Codes:

Laboratory compliance policies should

ensure that the CPT or HCPCS code that

is used to bill Medicare or Medicaid

accurately describes the service that was

ordered and performed. Laboratories

should choose only the code that most

accurately describes the ordered and

performed test. To ensure code

accuracy, laboratories may wish to

include a requirement that the codes be

reviewed by individuals with technical

expertise in laboratory testing before

such codes are approved for claims

submissions. The OIG views intentional

up coding (i.e., the selection of a code

to maximize reimbursement when such

code is not the most appropriate

descriptor of the service) as raising false

claims issues. If a laboratory continues

to have questions about code selection,

even after review by technical experts,

the facility should direct its questions to

its Medicare carrier or intermediary.

b. Selection of ICD–9CM Codes: At the

direction of the Health Care Financing

Administration (HCFA), Medicare

carriers and intermediaries have

established lists of tests that must be

accompanied by diagnostic information

to establish medical necessity before

Medicare coverage will be assumed

(‘‘limited coverage policy’’). Such

diagnostic information may be

submitted either through the use of

ICD–9CM codes or a narrative

description. Laboratory compliance

policies should direct that laboratories

will only submit diagnostic information

obtained from the test ordering

physician. Laboratories should not: (1)

Use diagnostic information provided by

the physician from earlier dates of

service (other than standing orders, as

discussed below at paragraph (4)); (2)

use ‘‘cheat sheets’’ that provide

diagnostic information that has triggered

reimbursement in the past; (3) use
9438 Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices

computer programs that automatically

insert diagnosis codes without receipt of

diagnostic information from the

physician; or (4) make up diagnostic

information for claims submission

purposes. Laboratories should: (1)

Contact the ordering physician to obtain

diagnostic information in the event that

the physician has failed to provide such

information; (2) provide services and

diagnostic information supplied

pursuant to a standing order executed in

connection with an extended course of

treatment; and (3) accurately translate

narrative diagnoses obtained from the

physician to ICD–9CM codes. Where

diagnostic information is obtained from

a physician or the physician’s staff after

receipt of the specimen and the

requisition form, documentation of the

receipt of such information should be

created and maintained.

c. Tests Covered by Claims for

Reimbursement: Laboratory compliance

policies should ensure that the

laboratory only submits claims for tests

that were both ordered and performed.

If a laboratory receives a specimen

without a test order or with an

ambiguous test order that is subject to

multiple interpretations, the facility

should check with the doctor to

determine what tests he or she wanted

performed before submitting a claim for

reimbursement to Medicare. Thus, if the

laboratory performed a test that the

doctor did not order, the laboratory will

not erroneously bill for that test.

Similarly, if a laboratory cannot perform

an ordered test due to, for example, a

laboratory accident or insufficient

quantities of specimen, the laboratory

should not submit a claim to Medicare.

The OIG considers the submission of a

claim for tests that were either not

ordered or were not performed to be a

potential false claim.

d. Billing of Automated Multichannel

Chemistry Tests: Laboratory compliance

policies should ensure that the

laboratory bills Medicare appropriately

for automated multichannel chemistry

tests. All tests appearing on HCFA’s

most recent list of automated

multichannel chemistry tests should be

billed using the appropriate CPT

(80002–80019) or HCPCS (G0058–

G0060) codes. Tests appearing on this

list should not be billed individually

unless only one such analyte test is

ordered and performed.

e. Billing of Calculations: Since the

OIG views compliance programs as a

check and balance system to reduce

error and improve quality, laboratory

compliance policies should ensure that

the laboratory does not bill for both

calculations (e.g., calculated LDLs, T7s,

indices, to name only a few) and the

tests that are performed to derive such

calculations. In many situations,

physicians are not offered a choice

about whether to receive such

calculations, nor are they aware of the

practice of some laboratories to bill

Medicare for such calculations in

addition to the underlying tests, as the

physicians themselves are only billed

for the underlying tests. At the current

time, the OIG views billing for both the

calculations and the underlying tests to

be double billing which may subject a

laboratory to criminal or civil penalties.

4. Reliance on Standing Orders

Although standing orders are not

prohibited in connection with an

extended course of treatment, too often

in the past they have led to fraudulent

and abusive practices. Laboratories must

be vigilant about this and take

appropriate steps to prevent abuse.

Thus, while laboratory compliance

plans can permit the use of standing

orders executed in connection with an

extended course of treatment, the

compliance plan should require the

laboratory to monitor existing standing

orders to ensure their continuing

validity. We suggest that, consistent

with State law requirements, a

laboratory should contact all nursing

homes from which the laboratory has

received such standing orders and

request that they confirm in writing the

validity of all current standing orders. In

addition, in accordance with State law,

laboratories should verify standing

orders relied upon at draw stations with

the physician, physician’s office staff, or

such other persons authorized by law to

order tests who have provided the

standing orders to the laboratory. With

respect to End Stage Renal Disease

(ESRD) patients, at least once annually,

laboratories should contact each ESRD

facility or unit to request confirmation

in writing of the continued validity of

all existing standing orders.

5. Compliance with Applicable HHS

OIG Fraud Alerts

The HHS OIG periodically issues

fraud alerts setting forth activities

believed to raise legal and enforcement

issues. Laboratory compliance plans

should require that any and all fraud

alerts issued by the OIG are carefully

considered by the legal staff, chief

compliance officer, or other appropriate

personnel. Moreover, the compliance

plans should require that a laboratory

cease and correct any conduct criticized

in such a fraud alert, if applicable to

laboratories, and take reasonable action

to prevent such conduct from recurring

in the future. If appropriate, a laboratory

should take the steps described in

Section G regarding investigations,

reporting and correction of identified

problems.

6. Marketing

Laboratory compliance plans should

require honest, straightforward, fully

informative and non-deceptive

marketing. It is in the best interests of

patients, physicians, laboratories and

Medicare alike that physicians fully

understand the services offered by the

laboratory, the services that will be

provided when tests are ordered, and

the financial consequences for

Medicare, as well as other payers, for

the tests ordered. Accordingly,

laboratories that market their services

should ensure that their marketing

information is clear, correct, nondeceptive and fully informative.

7. Prices Charged Physicians for Profiles

Laboratories are paid for their services

by a variety of payers in addition to

Medicare and other federally funded

health care programs. Such payers often

include health insurers, other health

care providers, and physicians. The

prices that laboratories charge,

particularly to physicians and especially

for profiles, raise compliance issues that

should be addressed in a laboratory’s

written compliance policies. Such

compliance policies should ensure that

as tests are included in or added to

profiles, the price for the enhanced

profile increases and the overall price

for the profile is never below cost.

Laboratories that do not increase the

price to a doctor for an enhanced profile

or that charge below cost for an

enhanced profile and then bill Medicare

or another federally funded health care

program the full third-party price for the

profile components will be risking false

claims and kickback enforcement

actions.

8. Retention of Records

Compliance programs should ensure

that all records required either by

Federal or State law or by the

compliance plan are created and

maintained. One of the best ways to

confirm that a compliance plan is

effective is through reports that reflect

results. The creation of such documents

will reach this goal, but it may also raise

a variety of legal issues, such as patient

privacy and confidentiality. These

issues are best discussed with legal

counsel.

9. Compliance As An Element of a

Performance Plan

To ensure that corporate integrity

rises to the level of importance required

of laboratories participating in Medicare
Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices 9439

or other federally funded health care

programs, compliance programs should

require that the promotion of and

adherence to compliance be an element

in evaluating the performance of

managers and supervisors. They, along

with other employees, should be

periodically trained in new compliance

policies and procedures. In addition, all

managers and supervisors involved in

the sale, marketing, or billing of

laboratory services, and those who

oversee phlebotomists should: (1)

Discuss with all supervised employees

the compliance policies and legal

requirements applicable to their

function; (2) inform all supervised

personnel that strict compliance with

these policies and requirements is a

condition of employment; and (3)

disclose to all supervised personnel that

the laboratory will take disciplinary

action up to and including termination

for violation of these policies or

requirements. In addition to making

performance of these duties an element

in evaluations, the compliance officer or

laboratory management may also choose

to include in the laboratory’s

compliance plan a policy that managers

and supervisors may be sanctioned for

failure to adequately instruct their

subordinates or for failing to detect noncompliance with applicable policies and

legal requirements, where reasonable

diligence on the part of the manager or

supervisor would have led to the

discovery of any problems or violations

and given the laboratory the opportunity

to correct them earlier.

B. Designation of a Compliance Officer

(or Equivalent)

Every laboratory compliance plan

should require the designation of a chief

compliance officer or an equivalent

(e.g., committee). This individual

should be responsible for developing

compliance policies and standards,

overseeing and monitoring the

company’s compliance activities, and

achieving and maintaining compliance.

The individual should be delegated

sufficient authority by the Board of

Directors (or other governing body) to

undertake and comply with these

responsibilities and should have open

access to senior management and the

governing body. Further, the chief

compliance officer should develop and

distribute to appropriate individuals all

written compliance policies and

procedures. These policies and

procedures should be readily

understandable by all employees (e.g.,

translated into other languages, if

necessary) and at a minimum, should

address the issues discussed herein.

C. Education and Training

Laboratory compliance programs

should require compliance and ethics

training for all employees, especially

personnel involved in billing, sales,

marketing and specimen collection and/

or test ordering. Such training should

emphasize the company’s commitment

to compliance with all laws, regulations

and guidelines of Federal and State

programs. Training should be conducted

at least annually and repeated at

regularly scheduled times, using a

variety of teaching methods and where

appropriate, languages to ensure that all

employees fully comprehend the

implications of failing to comply with

the laboratory’s compliance plan and all

applicable health care program

requirements. The training and

education program should cover the

laboratory’s compliance policies and

should reinforce the fact that strict

compliance with the law and laboratory

policies is a condition of employment.

Employees should be informed that

failure to comply may result in

disciplinary action, including

termination. Training of sales and

marketing personnel should highlight

the prohibition against offering

remuneration in return for referrals, and

the fact that the laboratory will take

appropriate disciplinary action up to

and including termination for violations

of the laws or failure to report a

potential violation by another employee,

supervisor or outside contractor or

provider.

In addition to compliance and ethics

training, we believe that laboratory

compliance plans also should address

the need for periodic continuing

education, which may be required by

law or regulation for certain laboratory

personnel, such as phlebotomists and

laboratory technicians. Continuing

education programs of this type will

help ensure a knowledgeable and more

productive staff.

Laboratory compliance programs

should leave no doubt in the minds of

employees and others who are

associated with the provider about the

company’s commitment to compliance

with all laws, regulations and guidelines

governing federally funded health care

programs. Compliance should be one of

the company’s most important

priorities. In addition to the compliance

and ethics training and continuing

education programs, a simple way to reemphasize this message is to post in

common work areas and other

prominent places accessible to all

employees a notice clearly reminding

employees of the laboratory’s

commitment to compliance with all

laws and regulations.

D. Communication

1. Access to the Compliance Officer

An open line of communication

between the compliance officer and his

or her staff is critical to the successful

implementation and operation of a

compliance program. If fraud and abuse

is going to be reduced, there should be

an open door, complete anonymity,

non-retribution policy available to all

employees to encourage

communication. Working with or

through the legal department can clarify

the gray areas of interpretation of

Medicare and Medicaid guidelines and

regulations, but in all cases, the

laboratory should encourage employees

not to guess, but to ask if there is

confusion or a question. Where

appropriate, awards for reporting

violations should be available.

2. Hotline

There are many vehicles for

developing a line of communication

between the employee and the

compliance office. Hotlines, e-mails,

and written memoranda are examples of

just a few. We suggest that laboratories

make available to all employees a

hotline telephone number which can be

used to anonymously report suspected

misconduct. Laboratories using a

hotline should post in common work

areas notices describing the hotline and

providing the telephone number.

Matters reported through the hotline

that suggest violations of compliance

policies or legal requirements should be

investigated immediately to determine

their veracity.

E. Auditing and Monitoring

The OIG will be critical of compliance

plans and programs that exist on paper

but are not earnestly implemented or

enforced. In addition to education and

training programs, policies, and notices,

a successful compliance program should

require the thorough monitoring of its

implementation and regular reporting to

senior executives and members of the

Board of Directors. Although many

monitoring techniques are available, an

effective tool to ensure enforcement is

the performance of regular, periodic

audits of the laboratory’s operations,

with particular attention paid to billing,

sales, marketing, notices and disclosures

to physicians, requisition forms, pricing,

and activities of phlebotomists and

others involved in the ordering of

laboratory services. Such audits should

be designed and implemented to ensure

compliance with the laboratory’s
9440 Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices

compliance policies, the laboratory’s

compliance plan, and all applicable

Federal and State laws. In addition,

auditing should address issues related

to contracts, competitive practices,

marketing materials, CPT/HCPCS

coding and billing, test information,

reporting and record keeping.

Quality assurance and zero tolerance

of fraud and abuse should be the goal of

the compliance division, and we believe

that auditing is a good tool to use to

reach that goal. Compliance audits

should be conducted in accordance with

pre-established comprehensive audit

procedures and should include, at a

minimum: (1) On-site visits; (2)

interviews with personnel involved in

management, operations, billing, sales,

marketing, and other related activities;

(3) reviews of written materials and

documentation used by the laboratory;

and (4) trend analysis studies. Formal

audit reports should be prepared and

submitted to the chief compliance

officer and the Board of Directors or

other governing body to ensure that

laboratory management is aware of the

results and can take whatever steps

necessary to correct past problems and

deter them from recurring. We suggest

that the audit or other analytical reports

specifically identify areas where

corrective actions are needed. In certain

cases, subsequent audits or studies

would be advisable to ensure that the

recommended corrective actions have

been implemented and are successful.

F. Disciplinary Actions

A viable compliance program must

include the initiation of corrective and/

or disciplinary action against

individuals who have failed to comply

with the laboratory’s compliance

policies and/or Federal or State laws or

who have otherwise engaged in

wrongdoing that has the potential of

impairing the laboratory’s status as a

reliable, honest, trustworthy provider.

The compliance program should

include a written policy statement

setting forth the degrees of disciplinary

actions that can be imposed upon

employees for failing to comply with the

company’s code of conduct, company

policies, and the law. Employees must

be advised and convinced that

disciplinary action will be taken, and

punishments enforced, for a discipline

policy to have the required deterrent

effect.

G. Corrective Action

1. Investigating, Reporting and

Correcting Identified Problems

a. Investigation: Violations of a

laboratory’s compliance program,

failures to comply with Federal and/or

State law, and other types of

misconduct threaten a laboratory’s

status as a reliable, honest and

trustworthy provider capable of

participating in federally funded health

care programs. Consequently, laboratory

compliance programs should require

that when the chief compliance officer

or others involved in management of a

laboratory learn of potential violations

or misconduct, they promptly

investigate the matter to determine

whether a material violation has in fact

occurred, so that if a violation has

occurred, management can take steps to

rectify it, report it to the government if

necessary, and make any appropriate

payments to the government. Depending

on the nature of the allegations, the

investigation into allegations of

wrongdoing or misconduct will

probably include interviews and review

of relevant documents, such as

submitted claims, test requisition forms,

and laboratory test reports. Some

laboratories may wish to engage outside

auditors or counsel to assist them with

the investigation.

If an investigation of an alleged

violation is undertaken and the

compliance officer believes the integrity

of the investigation may be at stake

because of the presence of employees

under investigation, the employee(s)

allegedly involved in the misconduct

probably should be removed from his/

her current work activity until the

investigation is completed. In addition,

the laboratory should take steps to

prevent the destruction of documents or

other evidence relevant to the

investigation. Once an investigation is

completed, if disciplinary action is

warranted, it should be immediate and

imposed in accordance with the

company’s written standards of

disciplinary action.

b. Reporting: If management receives

credible evidence of misconduct from

any source and, after appropriate

investigative inquiry, has reasonable

grounds to believe that the misconduct

either: (a) Violates criminal law, or (b)

constitutes a material violation of the

civil law, rules and regulations

governing federally funded health care

programs, then the laboratory should

report the existence of the misconduct

to the OIG as soon as possible. The OIG

recommends that the laboratory give

notice to the OIG of this type of

misconduct within sixty (60) days after

receipt of the credible evidence of

misconduct. Such prompt reporting will

demonstrate the laboratory’s good faith

and willingness to work with the

government to correct and remedy the

problem.

When reporting misconduct to the

government, a laboratory should give

the OIG any evidence relating to the

misconduct that the laboratory has,

including evidence disclosed to the

laboratory from another source. The

laboratory then should continue to

investigate the reported violation, and

once finished, should notify DOJ and

the OIG of the outcome of the

investigation, including a description of

the effect of the misconduct on the

operation of federally funded health

care programs or their beneficiaries. If

the investigation ultimately reveals that

criminal activity may have occurred, the

appropriate State or Federal authorities

should be notified immediately. As

discussed below, the laboratory should

also take appropriate corrective action,

including prompt restitution of any

damages to the government and the

imposition of appropriate disciplinary

action.

c. Corrective Action: If the

investigation reveals that misconduct

did occur, corrective actions should be

immediately initiated. For instance, if

the investigation reveals that the

laboratory has received overpayments,

the laboratory should make prompt

restitution of such sums to the

appropriate federally funded health care

program. Failure to repay the

overpayment immediately could be

interpreted as an intentional attempt to

hide the overpayment from the

government. For that reason, laboratory

compliance programs and written

policies and procedures should

emphasize that monies to which the

laboratory had no legal entitlement in

the first place may not be legally

retained and must be returned

immediately. In addition to making

prompt restitution and taking corrective

action, the laboratory should take

whatever disciplinary action is

necessary to cure the problems

identified by the investigation and

prevent it from happening again.

2. Non-Employment or Retention of

Sanctioned Individuals

Compliance programs should prohibit

the employment of individuals who

have been convicted of a criminal

offense related to health care or who are

listed by a Federal agency as debarred,

excluded or otherwise ineligible for

participation in federally funded health

care programs. In addition, until

resolution of such criminal charges or

proposed debarment or exclusion,

individuals who are charged with

criminal offenses related to health care

or proposed for exclusion or debarment

should be removed from direct

responsibility for or involvement in any
Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices 9441

federally funded health care program. If

resolution results in conviction,

debarment or exclusion of the

individual, the laboratory should

terminate its employment of that

individual or company.

Conclusion

These basic recommended elements

coupled with other published

regulations and guidelines are the

foundation for a comprehensive

compliance plan for clinical

laboratories. On advice from in-house

counsel and senior management,

clinical laboratories should add to or

modify these elements to better reflect

the corporate structure of the laboratory,

its mission, and its employee

composition. The OIG believes that by

implementing an effective compliance

plan, a laboratory will achieve better

quality control of claims submission

and reduce the risk of future criminal

and civil liabilities.

Dated: February 24, 1997.

June Gibbs Brown,

Inspector General.

[FR Doc. 97–5192 Filed 2–28–97; 8:45 am]

BILLING CODE 4150–04–P

National Institutes of Health

Notice of Meeting of the Advisory

Committee on Blood Safety and

Availability

Pursuant to Pub. L 92–463, notice is

hereby given of the meeting of the

Advisory Committee on Blood Safety

and Availability, Department of Health

and Human Services, March 20–21,

1997. This meeting will be held at the

National Institutes of Health, Warren G.

Magnuson Clinical Center, Jack Masur

Auditorium, 9000 Rockville Pike,

Bethesda, Maryland 20892.

The entire meeting will be open to the

public from 8:30 a.m. on March 20 to

adjournment on March 21. On March

20, the Committee will discuss hepatitis

C virus (HCV) infection, its occurrence

following blood transfusion, other

epidemiology of HCV infection and

appropriate ways of approaching the

public health aspects of this infection.

On March 21, the Committee will

address multiple aspects of the

theoretical possibility that CreutzfeldtJakob disease (CJD) can be transmitted

by blood transfusion. For each topic, a

time will be set aside for the public to

comment. Prospective speakers should

notify the Executive Secretary for this

meeting of their wish to present and

should plan for no more than 5 minutes

of comments.

Contact: Paul R. McCurdy, M.D.

Acting Executive Secretary, Advisory

Committee on Blood Safety and

Availability, Director, Blood Resources

Program, DBDR–MSC–7950, NHLBI,

NIH, Bethesda, Maryland 20892–7950.

Phone: 301/435–0065; Fax 301/480–

1060; E–Mail: paul—mccurdy@nih.gov.

Individuals who plan to attend and

need special assistance, such as sign

language interpretation or other

reasonable accommodations, should

contact the Executive Secretary in

advance of the meeting.

Dated: February 25, 1997.

LaVerne Y. Stringfield,

Committee Management Officer, NIH.

[FR Doc. 97–5164 Filed 2–28–97; 8:45 am]

BILLING CODE 4140–01–M

National Cancer Institute; Notice of

Closed Meeting

Pursuant to Section 10(d) of the

Federal Advisory Committee Act, as

amended (5 U.S.C. Appendix 2), notice

is hereby given of the following meeting

of the National Cancer Institute Initial

Review Group:

Agenda/Purpose: To review and evaluate

grant applications.

Committee Name: Subcommittee H—

Clinical Trials Subcommittee.

Date: April 8–9, 1997.

Time: 8 a.m.

Place: Buffalo Marriott, 1340 Millersport

Highway, Amherst, New York 14221.

Contact Person: John L. Meyer, Ph.D.,

Scientific Review Administrator, National

Cancer Institute, NIH, 6130 Executive Blvd.

Room 611C, Bethesda, Md 20892, Telephone:

301–496–7721.

The meeting will be closed in accordance

with the provisions set forth in secs.

552b(c)(4) and 552b(c)(6), Title 5 U.S.C.

Applications and/or proposals and the

discussion could reveal confidential trade

secrets or commercial property such as

patentable material and personal information

concerning individuals associated with the

applications and/or proposals, the disclosure

of which would constitute a clearly

unwarranted invasion of personal privacy.

(Catalog of Federal Domestic Assistance

Program Numbers: 93.393, Cancer Cause and

Prevention Research; 93.394, Cancer

Detection and Diagnosis Research; 93.395,

Cancer Treatment Research; 93.396, Cancer

Biology Research; 93.397, Cancer Centers

Support; 93.398, Cancer Research Manpower,

93.399, Cancer Control)

Dated: February 25, 1997.

LaVerne Y. Springfield,

Committee Management Officer, NIH.

[FR Doc. 97–5166 Filed 2–28–97; 8:45 am]

BILLING CODE 4140–01–M

National Institute of Arthritis and

Musculoskeletal and Skin Diseases;

Notice of Closed Meetings

Pursuant to Section 10(d) of the

Federal Advisory Committee Act, as

amended (5 U.S.C. Appendix 2), notice

is hereby given of the following

National Institute of Arthritis and

Musculoskeletal and Skin Diseases

Special Emphasis Panel (SEP) meetings:

Name of SEP: NIAMS Supplemental

(Teleconference).

Date: March 18, 1997.

Time: 11:00 a.m.–12:30 p.m.

Place: Natcher Building, 45 Center Drive,

Rm 5AS–25U.

Contact Person: Aftab A. Ansari, Ph.D.,

Natcher Building, 45 Center Drive, Rm 5AS–

25U, Bethesda, Maryland 20892–6500,

Telephone: 301–594–4952.

Name of SEP: NIAMS Program Project.

Date: April 1, 1997.

Time: 8:30 a.m.–adjournment.

Place: Bethesda Marriott, 5151 Pooks Hill

Road, Bethesda, Maryland 20814.

Contact Person: Aftab A. Ansari, Ph.D.,

Natcher Building, 45 Center Drive, Rm 5AS–

25U, Bethesda, Maryland 20892–6500,

Telephone: 301–594–4952.

Purpose/Agenda: To evaluate and review

research grant applications.

These meetings will be closed in

accordance with the provisions set forth in

sections 552b(c)(4) and 552b(c)(6), Title 5

U.S.C. The discussion of these applications

could reveal confidential trade secrets or

commercial property such as patentable

material and personal information

concerning individuals associated with the

applications, the disclosure of which would

constitute a clearly unwarranted invasion of

personal privacy.

(Catalog of Federal Domestic Assistance

Program Nos. [93.846, Project Grants in

Arthritis, Musculoskeletal and Skin Diseases

Research], National Institutes of Health,

HHS)

Dated: February 25, 1997.

LaVerne Y. Stringfield,

Committee Management Officer, NIH.

[FR Doc. 97–5163 Filed 2–28–97; 8:45 am]

BILLING CODE 4140–01–M

National Institute of Mental Health;

Notice of Closed Meetings

Pursuant to Section 10(d) of the

Federal Advisory Committee Act, as

amended (5 U.S.C. Appendix 2), notice

is hereby given of the following

meetings of the National Institute of

Mental Health Special Emphasis Panel:

Agenda Purpose: To review and evaluate

grant applications.

Committee Name: National Institute of

Mental Health Special Emphasis Panel.

Date: March 17, 1997.

Time: 11 a.m.

Place: Parklawn, Room 9–101, 5600

Fishers Lane, Rockville, MD 20857.