Lab owners must balance a multitude of tasks to have a successful business. They need to make sure they have the staff needed to run a safe, accurate and efficient facility. In addition to watching the bottom line, these entrepreneurs also need to have a basic understanding of applicable regulations. A failure to abide by these rules can result in allegations of fraud – which can come with serious penalties.
One of the best ways to avoid such allegations is to avoid common errors. Three of the more common compliance violations for diagnostic labs include:
#1: Use of third-party marketing firms
Lab owners want to make sure their facilities get as much business as possible. In an effort to meet this goal, lab owners may consider using a third-party marketing firm to help increase business. In some cases, these arrangements pose a risk of a compliance violation. For example, a compensation agreement based on a percentage of claims is likely a violation of the False Claims Act (FCA).
#2: Ineffective regulatory compliance program
It is important for diagnostic labs to have a regulatory compliance program. Implementation of an effective program is arguably one of the most effective ways a lab can proactively reduce the risk of a violation. This should include provisions to avoid potential violations of the FCA mentioned above as well as the Eliminating Kickbacks in Recovery Act (EKRA) and federal Anti-Kickback Statute (AKS). Our next post will delve into the importance of regulatory compliance in more detail.
#3: The Yates Memo
Released by then Deputy Attorney General of the United States Department of Justice, Sally Yates, in 2015, the Yates Memo focused on individual accountability for corporate wrongdoing. As a result, individuals within the lab (like lab owners, pathologists and staff) are at an increased risk of individual liability in the event of a compliance violation.
