The least you need to know about recent drug testing scrutiny

Several recent actions surrounding urine drug testing have the treatment community on edge. Let’s break down the issue and finish up with some advice.

What’s the crux of the problem?

It’s all about fraud. Payers are concerned about overutilized drug testing as an unchecked revenue source. It’s hard to pin down where testing—which is clinically beneficial—becomes more of a profit stream.

Who is suing whom?

For one, mega-insurer Cigna is suing Sky Toxicology and its associated labs for $20 million in federal court. Allegedly, the labs paid dividends to treatment centers as kickbacks for increased testing, and patients were also forgiven their copay responsibility. According to Cigna, the insurer has paid out $32.7 million in drug testing claims to the labs since 2011.

Additionally, Millennium Health, a lab company, agreed earlier this month to a $256 million False Claims Act settlement with the federal government.

According to the Department of Justice’s assessment, Millennium misrepresented the necessity of certain tests and encouraged clinicians to use its “custom profiles,” which included a default panel of tests for each specimen. According to litigators, Millennium billed federal and state governments for testing in situations where the referrals for the testing came in exchange for free supplies.

While Millennium debates some of the merits of the allegations, officials say they respect the government’s role in oversight and enforcement. “Millennium Health is currently a very different organization than we were in the past. We fully embrace our obligation to both commercial and publicly funded health plans to provide value to the healthcare system overall and ensure that doctors who order our testing solutions adequately demonstrate that those solutions are clinically necessary, and aligned with the latest available clinical guidelines.,” said CEO Brock Hardaway in a statement.

What are the risks for treatment centers?

There are two distinct fraud issues related to drug testing practices: non-medically necessary testing; and kickbacks, according to Harry Nelson, founding partner at Nelson Hardiman LLP in Los Angeles.

“We encounter many drug rehabs where the tests are ordered independent of the doctor, where the testing continues at a high frequency that doesn’t get adjusted based on outcomes— for example, where it would make sense to gradually extend the intervals between testing based on demonstrated compliance—and where there are no records to demonstrate that the doctor ever read the results, let alone that he or she commented or acted based upon the results,” Nelson tells Behavioral Healthcare in an email. “All of these issues raise the specter of payers treating the tests as fraudulent and abusive.”

What about centers that have their own labs?

In addition to False Claims Act scrutiny, providers of all types will increasingly see investigations related to the Stark Law.

Bill Bithoney, managing director with BDO Consulting, says the Stark Law aims to prevent provider kickbacks for referrals. However, he says, there are exceptions, such as when a practice has an in-office ancillary service. The exceptions cause some muddiness in applying the law.

“There are still so many problems and potential abuses, it’s hard to police,” Bithoney says.

Nelson says there are instances of “flagrant kickbacks” in relationships between treatment centers and independent labs, and he also sees sloppy execution of self-owned labs that don’t comply with state laws regarding disclosure and self-referral.

He says year over year, the volume of drug testing has increased significantly. In the addiction space, a growing number of providers own their own labs.

For example, in Palm Beach County, 31 labs are directly or indirectly tied to the owner of a sober living facility or treatment center, according to the Palm Beach Post.

If it seems like there are more investigations showing up across all of healthcare, that’s because ACA has provisions to make enforcement of fraud laws stronger. Bithoney says violations of the False Claims Act can result in civil penalties up to $100,000 for each “circumvention of the law.”

But urine drug screening and follow-up confirmation testing is beneficial and certainly needs to be included as part of good care. Where do we make the distinction?

The pivotal question for treatment providers is whether the services are medically necessary.

“They may just test for one drug or they may test for 100 drugs,” Bithoney says. “We have seen where they test for every conceivable medication and unbundle those bills, which results in huge bills that may not be seen as medically warranted.”

Nelson says one solution might be to specify the rationale behind the testing to separate the payment. Generally, testing can be used for medical purposes to enhance care, or it can be used as a behavioral deterrent for tracking abstinence. Both are acceptable industry standards. He suggests that patients might be the ones to pay directly for the deterrence-related sobriety testing.

“We would see less testing, more low-cost, point-of-care testing, and insurance companies would not be so focused on this as a fraud and abuse issue,” Nelson says.

What should treatment centers do now?

Use clinical guidelines from SAMHSA or ASAM on drug testing. Review insurance contracts. Study state and federal laws. Be vigilant for conflicts of interest or the appearance of conflicts of interest, experts say.

Bithoney recommends asking the Department of Health and Human Services or the Department of Justice if you have any questions about how federal law applies to your particular business and protocols.

Experts also advise treatment centers to refine the focus on quality improvement according to clinical guidelines.

“Drug testing does not speak for itself,” Kirk Moberg, MD, PhD, medical director for the Illinois Institute for Addiction Recovery, who is also a medical review officer, says. “It’s a nice cookbook, but you need a good chef who can interpret it, and that’s the clinician.”