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Diagnostic labs victims of “aggressive audit tactics”

Audit activity by government regulators and private payers has been on the rise. These investigations ramped up throughout 2017 and accelerated through 2018. The dramatic increase in audits is likely connected to the price cuts implemented with the new Medicare Part B.

Which labs are at risk? Toxicology, pharmacogenomics, molecular and genetic testing laboratories are often at highest risk. Though with the latest jump in audit rates, every medical laboratory is at an increased risk when compared to prior years.

How serious are these diagnostic lab audits? An audit generally involves an investigation of the lab. The results of the investigation can trigger a “seven to eight” figure monetary demand.

How can I prepare my lab for an audit? Medical directors and lab executives can take proactive steps to protect their labs from an audit. These steps include:

  • Self-audits. If not already conducted, begin implementing self-audits on a regular basis. These audits can provide your group with a review of areas that need change and make adjustments as necessary.
  • Action plan. One specific accusation to prepare for: accusations of proficiency test violations. Help prepare your lab by putting together an action plan if the government pursues this violation. If the government is successful, your lab could lose its Clinical Laboratory Improvement Amendment (CLIA) license.
  • Avoid piggybacks. An audit will scrutinize piggyback arrangements — when a lab needs to bill under another provider. If possible, avoid these interactions.

In the event of an audit, additional action is wise. Contact an attorney experienced in health care law issues to help better ensure your legal rights are protected through the process.

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